Micron projects tightening RAM shortages through 2028 as it generates record profit

Micron, the semiconductor giant, has projected worsening RAM and storage chip shortages through 2028 despite announcing a record gross margin of 86.25% during its FY 2026 earnings call. CEO Sanjay Mehrotra stated that the company has already sold most of its capacity for the next year, and customers can expect to pay more compared to 2026.

Mehrotra emphasized that the supply-demand environment will only become tighter, with demand surpassing supply in both 2027 and 2028. The industry is experiencing a rapid increase in production, with NAND and DRAM shipments expected to grow in the low-to-mid 20s percentage range for the next two years. However, this growth may not be enough to meet the growing demand for memory chips, as manufacturers prioritize HBM demand for AI data centers.

Micron expects shipments of these chips to grow faster than conventional DRAM. Despite the industry-wide shortage, Micron reported record financial guidance, forecasting a $61.5 billion FQ1 revenue and an 86.25% gross margin, translating to a gross profit of over $53 billion. The company also announced an earnings per share of $38.15, plus or minus $1.00, for approximately 1.15 billion shares.

This surge in earnings can be attributed to the significant investments being made in AI data centers. However, the increased wages for memory workers at Samsung and SK hynix, coupled with Micron's workers in Taiwan threatening to strike, have raised concerns about the high prices that consumers will have to pay for RAM and storage.

Micron's predictions contradict Acer's CEO, who had predicted a decline in PC prices by late 2027. The future of DRAM and NAND pricing remains uncertain, and only time will reveal which CEO's forecast is accurate.