systems
Showing Huge Progress in Revenue, Profit and Margin, with More to Come
Memory maker Micron has warned that RAM shortages will persist until 2028, and possibly beyond.
Speaking during the company’s fiscal 2026 earnings call, company CEO and President Sanjay Mehrotra reminded investors that Micron had already sold most of the memory it would make next year and said customers would pay “much higher prices” than what they shelled out this year.
“In calendar years 2027 and 2028, we see demand outpacing supply,” he added. “In fact, we see greater tension in the industry in 2027 and 2028 compared to 2026. Overall, the supply-demand environment is only getting tighter.”
“We have no idea when supply and demand will return to balance. »
Micron plans to bring new factories online in 2028 – helped by planned investments of $25 billion in the first half of its new fiscal year – but executives cautioned that those facilities would not immediately help improve availability or reduce prices.
The CEO said demand for high-bandwidth memory (HBM) needed for AI hardware is growing faster than for DRAM used in servers. Micron is also finding ways to increase its margins for HBM, which is currently not as profitable as DRAM.
Both types of memory, however, are extremely cost-effective.
Micron’s earnings announcement reveals that its cloud memory business unit, which focuses on HBM, recorded a gross margin of 83% in the fourth quarter, a big jump from 59% in the fourth quarter of last year. The core data center business unit, which sells more DRAM, reported a gross margin of 90% in the fourth quarter, up from 41% last year. Data center SSD sales reached nearly $10 billion for the quarter, an increase of more than 1,000% year-over-year.
Fourth-quarter revenue was $54.25 billion, up from $11.3 billion last year. Annual revenue was $133.2 billion, much higher than last year’s $37.4 billion. Net profit increased 895 percent to $85 billion.
Mehrotra told investors that Micron has “a strong roadmap for future HBM products and is proud to work with NVIDIA on the industry’s first custom HBM4E implementation, NV-HBM, which will be adopted on the next generation of GPUs and NVLink fusion platforms. In NAND, AI context memory storage used for KV cache offload and hard drive move opportunities expand the potential market for SSDs.”
Micron forecasts first quarter FY27 revenue of $61.5 billion plus or minus $1.5 billion and a gross margin of 86.25%. The company’s stock price soared, then returned to its closing price after hours, suggesting investors were expecting colossal growth and profits. ®
Gn bussni
