Memory shortage could worsen through 2028: Micron CEO
What's the story
Micron Technology, a leading supplier of DRAM and NAND memory chips, has warned of an impending worsening in the memory shortage. The company's CEO Sanjay Mehrotra made the prediction during an earnings call. He said that "memory and storage supply-demand conditions will be much tighter in calendar 2027 and 2028 than they were in 2026. "
Production constraints
Micron's production capacity for 2027 largely booked
The high demand for memory chips has led to Micron's production capacity for 2027 being largely booked.
Mehrotra said over 75% of Micron's 2027 output is already locked in.
He also noted that most customer discussions are now focused on 2028 and beyond, indicating a long-term trend of high demand and potential supply constraints in the memory chip market.
Market forecast
DRAM and NAND shipments to grow by 20%
Micron expects total industry shipments for DRAM and NAND to grow by about 20% over the next two years.
However, the company believes that production will fall short of demand as AI companies continue to purchase components for new data centers.
This could potentially exacerbate the memory shortage crisis in the coming years.
Strategic adjustments
Micron to increase spending on DRAM manufacturing next year
In response to the tightening supply-demand conditions, Micron plans to increase its spending on DRAM manufacturing next year.
The company has also been raising prices for High Bandwidth Memory (HBM), which is used in AI chips.
Mehrotra said, "Our prices for HBM were negotiated with our customers last year, and we mentioned that now, for 2027, a large part of the volume is already sold out for 2027 for HBM, and the prices are much higher than 2026 prices."
Long-term impact
PC and electronics prices rising due to memory chip shortage
The memory shortage could extend into 2030, according to an executive at another major supplier, SK Hynix.
This long-term projection highlights the severity and potential duration of the current memory chip supply-demand imbalance.
In response to these market conditions, PC makers and electronics vendors have been raising prices for their products.