Micron CEO Sanjay Mehrotra says the memory shortage is expected to deepen, not ease, over the next two years. Demand is outpacing the company’s production, and Micron says it has no clear timeline for supply and demand to rebalance. For PC builders and hardware buyers, that outlook points to continued pressure on memory and storage availability and pricing.
Key takeaways
Micron’s latest forecast highlights how AI data-center demand is competing for capacity used across the wider memory market. New manufacturing space is planned, but it will take time to add meaningful production.
- Micron expects industry supply to be tighter in 2027 and 2028 than in 2026.
- More than 75% of Micron’s 2027 output is already committed to customers.
- The company plans about $25 billion in capital spending in the first half of fiscal 2027.
- Micron reported DRAM prices rose in the high-teens percentage range and NAND prices about 30% in the prior quarter.
AI demand is consuming memory capacity
On Micron’s fiscal fourth-quarter earnings call, Mehrotra said demand for memory and storage continues to exceed supply, with customers seeking longer-term commitments. Growth in AI infrastructure is driving demand for high-bandwidth memory (HBM), while data centers also require conventional DRAM and solid-state storage.
Micron expects HBM shipments across the industry to grow faster than conventional DRAM through 2028. Producing newer HBM generations also uses capacity that could otherwise support other memory products, adding to supply constraints for hardware makers and, indirectly, PC component buyers.
Customer commitments stretch years ahead
Micron said more than three-quarters of its 2027 output is already allocated, while discussions with customers are increasingly focused on 2028. The company has signed 26 strategic customer agreements, including take-or-pay arrangements, and expects those deals to account for more than 35% of revenue through 2030.
These commitments give Micron greater visibility when planning production, but they also indicate that less supply may be available for buyers without long-term contracts. The agreements include different pricing structures, so they do not guarantee a single fixed price across all customers.
New capacity will take time to ramp
Micron plans substantial investment, including roughly $25 billion in capital spending during the first half of fiscal 2027. However, building clean-room space, installing equipment and gradually ramping production takes time. The company expects its Idaho ID2 facility to begin wafer output in late 2028, with additional output building over time rather than arriving all at once.
Micron forecast fiscal first-quarter 2027 revenue of about $61.5 billion, plus or minus $1.5 billion, and a gross margin of 86.25%. Those projections reflect strong current demand, but the company has not said when the broader market will return to balance. Its outlook is a company forecast, and conditions could change if demand, investment or production plans shift.