Industry demand has strengthened since our last earnings conference call, and we expect the supply-demand conditions for memory and storage to be much tighter in fiscal 2027 and 2028 than they were in 2026. AI is becoming super intelligent, and memory is enhancing that intelligence and the competitiveness of our customers’ platforms. Even with additional industry DRAM cleanroom space projects with robust demand trends, including new upward demands from customers, we do not have visibility on when supply and demand will return to balance.
In June, Micron’s CEO said he expected industry supply to gradually improve in 2028, but could not predict when supply would catch up with demand. The company now says it still has no prospect of breaking even, even with the additional space planned for industrial clean rooms. Acquiring new capacity also takes time, since Micron’s ID2 fab in Idaho is not expected to start wafer production until late 2028. Mehrotra also said that more than 75% of Micron’s 2027 production is already reserved for customers. On the consumer side, Micron said DRAM prices rose around 15% last quarter, with NAND up around 30%. It appears that relief is not near, although these are company projections and could change.
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