Micron Reports Continued RAM Shortages; Prices Expected to Rise
- Micron states global RAM shortages will persist, with next year’s production largely sold out.
- CEO Sanjay Mehrotra warns consumers to expect higher prices as demand exceeds supply through 2028.
- Samsung also predicts worsening component shortages beyond 2026.
Micron Technology has announced that global RAM shortages show no signs of easing, revealing during its earnings call that it has predominantly sold out its production for the upcoming year. CEO and chair Sanjay Mehrotra indicated that customers should prepare for prices significantly exceeding those in 2026, stating that demand will continue to outstrip supply through 2027 and into 2028. He described the industry’s supply-demand balance as “only getting tighter”.
Mehrotra acknowledged that Micron lacks visibility on when the supply-demand equilibrium will be restored. The majority of the company’s manufacturing capacity is allocated for high-bandwidth memory (HBM) required for AI data centers, leaving minimal availability for consumer-grade memory, a situation that has contributed to inflated prices.
This shortage has driven up costs for various consumer electronics utilizing these chips, including gaming consoles such as the PlayStation 5, Xbox Series X/S, and Switch 2, which have seen multiple price increases. Valve’s Steam Machine launched at a higher-than-anticipated price, with the company hinting at possible future increases.
Micron plans to bring new factories online by 2028, supported by a $25 billion capital expenditure budget for the first half of its new financial year. However, executives warned that this additional capacity will not lead to immediate relief regarding price or availability.
Mehrotra pointed out that the demand for HBM is accelerating faster than that for DRAM utilized in servers and mentioned that Micron is focusing on enhancing profitability margins on HBM, which currently lags behind DRAM.
In Q4, Micron’s cloud memory unit, which includes HBM, recorded an 83% gross margin, a substantial increase from 59% the previous year. Meanwhile, its core datacenter business, which sells more DRAM, achieved a 90% gross margin, up from 41% year-on-year. Additionally, datacenter SSD sales nearly reached $10 billion for the quarter, reflecting a year-on-year increase of over 1,000%.
Micron also highlighted its collaboration with Nvidia on NV-HBM, which is being promoted as the first custom HBM4E implementation for next-generation GPUs and NVLink Fusion platforms. The company noted that AI-driven demand for context memory storage is expanding the market for its NAND-based SSDs.
In a related development, Samsung, one of the largest manufacturers of memory and storage globally, recently announced its expectations for the global component shortages to worsen into the following year during its earnings call.
News Courtesy of Eurogamer
