Global RAM shortages are unlikely to ease until 2028, according to Micron CEO Sanjay Mehrotra. Speaking on the memory manufacturer's earnings call, Mehrotra indicated that the company has already committed most of its production for the coming year, suggesting that prices will remain elevated well above 2026 levels.
The CEO stated that demand for high-bandwidth memory (HBM), crucial for AI data centers, is rapidly outpacing supply. This surge has led the major memory manufacturers, including Micron and Samsung, to prioritize HBM production over consumer-grade memory. Consequently, the availability of RAM for consumer electronics has diminished, driving up prices for devices like the PlayStation 5, Xbox Series X/S, and Nintendo Switch 2.
Micron plans to bring new factories online in 2028, supported by a significant capital expenditure budget. However, executives cautioned that these new facilities will not immediately resolve the price and availability issues. Mehrotra highlighted that HBM demand is growing faster than that of DRAM used in servers, and Micron is working to improve its margins on HBM, which currently lags behind DRAM in profitability. Despite this, Micron's cloud memory unit, which includes HBM, saw its gross margin increase to 83 percent in the fourth quarter from 59 percent a year prior. The company's core data center business, selling more DRAM, achieved a 90 percent margin, up from 41 percent.
In addition to HBM, Micron is collaborating with Nvidia on NV-HBM, an implementation for next-generation GPUs. The company also noted that AI-driven demand for context memory storage is expanding the market for its NAND-based SSDs. Samsung has echoed these concerns, also reporting in its recent earnings call that it anticipates the component shortage crisis to worsen into the next year.