Posts huge leaps in revenue, profit, and margin, with more to come:
Memory-maker Micron has warned that RAM shortages will persist into 2028, and perhaps beyond.
Speaking on the company's FY 2026 earnings call, CEO and company chair Sanjay Mehrotra reminded investors that Micron has already sold most of the memory it will make next year and said customers will pay "much higher prices" than they shelled out this year.
"In calendar 2027 as well as 2028, we see demand exceeding supply," he added. "In fact, we see greater tightness in the industry in 2027 and in 2028 versus 2026. Overall, supply-demand environment is only getting tighter."
"We do not have line of sight to when supply and demand will return to balance."
Micron plans to bring new factories online in 2028 – helped by planned capex of $25 billion in the first half of its new financial year – but execs warned those facilities won't immediately help to improve availability or ease prices.
The CEO said demand for the high-bandwidth memory (HBM) needed in AI hardware is growing faster than it is for the DRAM used in servers. Micron is also finding ways to expand its margins for HBM, which is currently not as profitable as DRAM.
Both types of memory are, however, enormously profitable.
(Score: 3, Insightful) by Frosty Piss on Saturday October 03, @06:36PM (9 children)
If companies like Micron are "cleaning up" with record high profit margins on this shortage of RAM, is there any real incentive to mitigate the shortage by building out more production - especially for DRAM verses the coveted HBM, which mere mortals such as myself might want to buy?
(Score: 3, Interesting) by Anonymous Coward on Saturday October 03, @07:14PM
Only if we make the government use "eminent domain" on their copyrights and patents, or just nullify them, so we can open our own factories right here. It's time to dismantle this cartel.
(Score: 3, Interesting) by sneftel on Saturday October 03, @09:18PM (4 children)
Sure; absent market elasticity and a price-fixing conspiracy which I suspect you’ll assume, normal competition pressure would incentivize increased production. But the market elasticity is huge here. Building chip fabrication capacity, even if you have the patents licensed and the trade secret knowledge, is time consuming and expensive. Micron is in a solid market position, and I could easily see them being disinclined to chase their customers’ capex bubble and run the risk of that capacity not paying off for more than a couple of years. And said customers aren’t likely to push them too hard on it: an industry-wide shortage like this is cheaper for each individual player than less observable scarcities would be. The RAM shortage is the safety car the racecars are all lining up behind; the lap will be slower, but way less chance of a blowout.
(Score: 2) by sneftel on Saturday October 03, @09:29PM
Sorry, inelasticity, of course.
(Score: 3, Touché) by Frosty Piss on Sunday October 04, @03:08AM (2 children)
People keep BLATHERING about the time it takes to build chip fabs. But these needs were known YEARS ago. Failure to build them is a function of the GREED for the profit of shortage.
(Score: 2) by sneftel on Sunday October 04, @09:49AM (1 child)
Sweetie, years ago our present was years in the future. Risk is risk, then and now.
(Score: 0) by Anonymous Coward on Wednesday October 07, @06:12AM
(Score: 3, Insightful) by weirsbaski on Sunday October 04, @03:44AM (2 children)
Yes there is. If Micron built another plant then per-unit prices would go down some, but Micron's share of industry revenue would go up more than that.
The real blockers are the time it takes to build+launch a new plant (would it go online soon enough to take advantage of crazyland-pricing?), and how long will crazyland-pricing last (if RAM prices were to drop significantly 2 years from now, would they still be happy having committed big money on an expansion?).
(Score: 2) by Frosty Piss on Sunday October 04, @05:40AM (1 child)
And Micron had "no idea" 5 or 8 years ago the maybe should consider building more fabs? Bullshit.
(Score: 0) by Anonymous Coward on Wednesday October 07, @06:08AM
Why should they spend money to make more money, when they can make more money without spending?
Remember lots of people are saying the AI stuff is a bubble. So why should the RAM makers invest and assume that the bubble won't pop?
(Score: 5, Insightful) by looorg on Saturday October 03, @07:21PM (1 child)
We should probably be honest with ourselves. They are never going to come down in price again. Every price hike becomes the new normal. The age of available "cheap" home computing is over. Now enjoy your overpriced tablet and phone peon.
The only option is that someone out there just decided that the price is to good and they find some second rate place where they can crank out not quite state of the art stuff and just saturate the home market. But that might not makes business sense. Better to artificially keep the price high. Suck every $ from the market you can.
(Score: 2) by stormreaver on Monday October 05, @04:22PM
When Taiwan flooded, and hard drive prices skyrocketed, they came back down after a couple years. It does happen, though I agree with you about not getting too hopeful this time.
(Score: 5, Insightful) by shrewdsheep on Saturday October 03, @08:23PM
We just learned the other day that China stole the trade secrets from Samsung, now producing competitive DRAM. Let's hope the Chinese companies steal from each other so that we get our cheap RAM back.