Micron CEO Sanjay Mehrotra has warned that global RAM shortages will persist into 2028, telling investors that his company has already sold most of next year’s production. On the earnings call, he said demand would keep outstripping supply through 2027 and into 2028, and he called the industry’s supply-demand balance “only getting tighter.”
Mehrotra acknowledged that Micron still expects “not have line of sight to when supply and demand will return to balance.”, which shows the company believes the industry’s tight conditions will continue pushing up prices across the consumer electronics market without any sign of ending.
The Cause of the Shortage
Much of what the memory business produces is set aside for high-bandwidth memory, known as HBM, used by AI datacenters. The three biggest memory makers — including Samsung — have almost nothing set aside for consumer-grade memory. This gap has driven consumer memory prices up sharply.
The result has been rising prices across almost every consumer electronic device that uses these chips. Game consoles like the PlayStation 5, Xbox Series X/S and Switch 2 have all gone up in price several times in some cases. Valve’s Steam Machine also launched at a much higher price than Valve expected, and the company hinted it may even have to raise prices again.
Micron’s Own Numbers
Micron has reported its highest-ever earnings. The company’s cloud memory division, which includes HBM, posted a gross margin of 83 per cent in Q4, compared to 59 per cent in the prior year. The core datacenter business, which sells more DRAM, reached 90 per cent, up from 41 per cent. Datacenter SSD sales came close to $10 billion for the quarter, representing a rise of over 1,000 per cent year-on-year.
Micron detailed its partnership with Nvidia on NV-HBM, described as the first custom HBM4E design for next-generation GPUs and NVLink Fusion systems. Mehrotra pointed out that HBM is outpacing server DRAM in demand, and noted the company is pushing to raise its margins on HBM, which presently falls short of DRAM’s profitability.
What Comes Next
The company intends to launch fresh production sites in 2028, with a budget of $25 billion set aside for the initial half of its new fiscal period. Officials warned that the added output will not ease prices or supply shortages right away.
| Year | Expected Market Condition |
|---|---|
| 2026 | Prices well above 2026 levels |
| 2027 | Demand outstrips supply |
| 2028 | Supply still catching up |
There is no quick fix on display here. The industry’s supply-demand balance is tightening, not loosening, even as new factories come online.
Why This Matters
A chief executive officer’s warning at Micron reminds us that the rise of artificial intelligence is not merely a tale about technology. It is also a story about prices. The memory chips that drive datacenters likewise run consumer devices, and the foundries making those chips have production schedules booked years ahead.
The makers of consoles and PCs have already increased their prices once, and the pressure to raise them again shows no sign of letting up. As a result, consumers who purchase a new device in the coming years will probably find the cost higher than they anticipated.
The open question concerns the duration of the imbalance. Mehrotra responds without hesitation, offering no definitive figure, instead saying that nobody has a clear answer.
Source material: “Memory shortages set to persist into 2028, warns Micron CEO,” Eurogamer.
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