Micron projects tightening RAM shortages through 2028 as it generates record profit — record 86.25% gross margin drives over $53 billion in quarterly profit
“We do not have line of sight to when supply and demand will return to balance.”
Micron said during its FY 2026 earnings call that RAM and storage chip shortages will worsen in 2027 and 2028, even as it announced a record gross margin of 86.25%. CEO and chairperson Sanjay Mehrotra said that the company has already sold most of its capacity for next year and that customers will have to pay more compared to 2026.
“In calendar 2027 as well as 2028, we see demand exceeding supply. In fact, we see greater tightness in the industry in 2027 and in 2028 versus 2026. Overall, supply-demand environment is only getting tighter,” Mehrotra said. “We do not have line of sight to when supply and demand will return to balance.”
The memory and storage industry is not holding back on increasing production, though, with Micron saying that NAND and DRAM shipments are expected to grow in the low-to-mid 20s percentage range for the next two years. However, it seems that this is not enough to match growing demand, as it expects “the industry to remain supply constrained in both years.” Still, it seems that manufacturers are prioritizing HBM demand for AI data centers, with the company expecting shipments of these chips to grow faster than conventional DRAM.
Micron and other chip manufacturers are bringing new factories online to increase output, but it’s going to take years before they can start producing chips. But even as we’re amid an unprecedented multi-year memory chip shortage, Micron also announced record financial guidance. It forecasted a record $61.5 billion FQ1 revenue and a gross margin of 86.25%, implying a gross profit of more than $53 billion. After accounting for an estimated $2.06 billion in operating expenses and a tax rate of around 15.5%, the company said its earnings per share sit at $38.15, plus or minus $1.00, for approximately 1.15 billion shares.
These are record numbers, but it’s not surprising given the amount of money being poured into AI data centers. It has gotten to the point where the memory workers from Samsung and SK hynix have demanded and received bonuses worth hundreds of thousands of dollars, with Micron’s workers in Taiwan threatening to strike if they do not receive a bigger slice of the AI pie. While this is good news for the average employee from these big companies, it’s unfortunately bad news for the average person who must pay for RAM and storage at higher prices.
Micron’s prediction goes directly against the Acer CEO’s prediction that PC prices will decline by late 2027, especially as Chinese RAM chips enter the market and consumers simply refuse to pay more for expensive memory chips. We can only wait and see which of these CEOs will be correct when it comes to DRAM and NAND pricing.
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Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.
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Jame5 ReplyMicron projects tightening RAM shortages through 2028 as it generates record profit
The call is coming from inside the house. The people who want to make as much profit as possible are the ones deciding whether or not to increase manufacturing capacity. -
TechieTwo This is your typical manipulation of consumer expectations for excess profits. Keep telling them the shortage will exist even when it's unlikely unless intentionally created.Reply -
usertests Reply
Most consumers do not know a Micron, much less pay attention to earnings calls.TechieTwo said:This is your typical manipulation of consumer expectations for excess profits. Keep telling them the shortage will exist even when it's unlikely unless intentionally created.
This is a convenient-for-Micron story about infinite demand being told because going against the grain would unnecessarily hurt the stock price, and the execs may have to tighten their belts and purchase less fancy wines, cars, golden parachutes, etc. -
Tanakoi Reply
Every memory maker on the planet is rapidly building new capacity at the fastest pace in history. But $20B fabs takes several years to bring online. How quickly people forget it was just 2023 when RAM oversupply caused memory makers to lose billions due to massive oversupply.Jame5 said:The call is coming from inside the house. The people who want to make as much profit as possible are the ones deciding whether or not to increase manufacturing capacity. -
Tanakoi Reply
I find it an astonishing tribute to human psychology how people are able to rationalize their own security beliefs. Memory prices are high because every fab that exists is working double-shift overtime and selling every chip they can produce months or even years into the future. And - other than a few disgruntled videogamers - pretty much everyone understands this demand is real, and not some convenient fiction cooked up in Micron and Samsung boardrooms.usertests said:This is a convenient-for-Micron story about infinite demand being told because going against the grain would unnecessarily hurt the stock price, and the execs may have to tighten their belts and purchase less fancy wines, cars, golden parachutes, etc. -
hotaru251 Reply“We do not have line of sight to when supply and demand will return to balance.”
they have a line of sight....but it benefits them to ignore that because scarcity is making them more profit and expanding production more (which they could do) costs money and eventually when boom is over they dont get used.
can't wait for boom to end and memory becomes dirt cheap the likes we havent seen before due to the used market because frick the corpo -
Bigshrimp It's the end of the PC market as far as I can tell. They are pulling the ladder up and making people pay out the nose for parts that are inflated in price on purpose. It's all unregulated avarice and is not sustainable. Even the enterprise market will run out of money eventually, after the giant Ponzi scheme collapses.Reply -
alan.campbell99 Prioritising HBM, most of which is paired with Nvidia AI chips, which are largely being prepurchased and largely end up sitting in warehouses because the 'warm shells' aren't available. If a good chunk of these are effectively obsolete before they can be installed and cannot be otherwise repurposed then this could be a spectacular waste.Reply -
Tanakoi Reply
The sky isn't falling. PC sales were up the first two quarters of 2026, and even the most pessimistic assumptions for the last half of the year are for only a 10% decline.Bigshrimp said:It's the end of the PC market as far as I can tell.
No matter how we whine and stamp our feet, we can't change the laws of economics. When demand exceeds supply, there are only two possibilities -- either prices rise, or the shelves run bare. Take your pick.Bigshrimp said:They are pulling the ladder up and making people pay out the nose for parts that are inflated in price on purpose.