Micron CEO: Memory Shortages to Persist Until 2028

Micron anticipates ongoing global RAM shortages, with most of its next year's production already sold. CEO Sanjay Mehrotra advises customers to expect prices significantly higher than in 2026. He predicts demand will continue to exceed supply through 2027 and into 2028, stating the industry's supply-demand balance is "only getting tighter."

Mehrotra admitted Micron lacks visibility into when supply and demand will rebalance. He noted that the majority of production capacity is allocated to high-bandwidth memory (HBM) for AI data centers. This leaves limited capacity for consumer-grade memory from the top three manufacturers, including Samsung, leading to price increases.

These increased costs have driven up prices for consumer electronics reliant on these chips, such as the PlayStation 5, Xbox Series X/S, and Switch 2. Valve's Steam Deck also launched at a higher price than anticipated, with potential for further increases.

Micron plans to launch new factories in 2028, supported by $25 billion in capital expenditures for the first half of its new financial year. However, executives cautioned that this new capacity will not immediately resolve pricing or availability issues.

Mehrotra explained that HBM demand is growing faster than the DRAM used in servers. Micron is focused on improving its HBM profit margins, which currently lag behind DRAM.

In Q4, Micron's cloud memory division, which includes HBM, reported an 83% gross margin, up from 59% a year prior. Its core data center business, selling more DRAM, achieved a 90% margin, a significant increase from 41%. Data center SSD sales neared $10 billion for the quarter, a year-on-year increase exceeding 1,000%.

The company also highlighted its collaboration with Nvidia on NV-HBM, presented as the first custom HBM4E implementation for next-gen GPUs and NVLink Fusion platforms. Micron stated that AI-driven demand for context memory storage is expanding the market for its NAND-based SSDs.

Samsung, a major player in memory and storage, echoed this outlook. In a recent earnings call, the company indicated it expects the global component shortage crisis to worsen into next year.