Posts huge leaps in revenue, profit, and margin, with more to come
Micron Technology has warned that RAM shortages will persist into 2028 and potentially beyond. During the company’s fiscal 2026 earnings call, CEO and Chairman Sanjay Mehrotra informed investors that Micron has already sold the majority of its memory output for the coming year and that customers should expect “much higher prices” than those seen in the current period.
“In calendar 2027 as well as 2028, we see demand exceeding supply,” Mehrotra stated. “In fact, we see greater tightness in the industry in 2027 and in 2028 versus 2026. Overall, the supply-demand environment is only getting tighter. We do not have line of sight to when supply and demand will return to balance.”
Although Micron plans to bring new fabrication facilities online in 2028—supported by a planned capital expenditure of $25 billion in the first half of its new financial year—executives cautioned that these plants will not immediately alleviate availability constraints or ease pricing pressure.
Mehrotra noted that demand for high-bandwidth memory (HBM), essential for AI accelerators, is outpacing demand for standard server DRAM. The company is also working to improve HBM profit margins, which currently trail those of DRAM, though both segments remain highly profitable.
The earnings release underscores this profitability. Micron’s cloud memory business unit, focused on HBM, posted a fourth-quarter gross margin of 83 percent, a significant increase from 59 percent a year earlier. The core data center unit, which sells primarily DRAM, recorded a Q4 gross margin of 90 percent, up from 41 percent. Data center SSD sales approached $10 billion for the quarter, surging more than 1,000 percent year-over-year.
Quarterly revenue reached $54.25 billion, up from $11.3 billion in the prior year. Annual revenue landed at $133.2 billion, vastly exceeding the previous year’s $37.4 billion. Net income skyrocketed 895 percent to $8.5 billion.
Mehrotra highlighted a “strong roadmap for future HBM products,” noting pride in collaborating with Nvidia on the industry’s first custom HBM4E implementation—dubbed NV-HBM—for adoption on next-generation GPUs and NVLink Fusion platforms. In NAND, he added, AI context memory storage used for key-value cache offload and hard-drive displacement is expanding the addressable market for SSDs.
Micron forecast fiscal Q1 2027 revenue of $61.5 billion, plus or minus $1.5 billion, with a gross margin of 86.25 percent. The company’s share price spiked initially in after-hours trading before settling near its regular-session close, suggesting the market had largely anticipated the colossal growth and profitability figures.
