Micron reported fiscal fourth-quarter revenue of $54.25 billion, up from $11.3 billion a year earlier, and warned that memory demand would exceed supply into 2028, The Register reported on 1 October.
Key points
- Chief executive Sanjay Mehrotra expects memory supply to be tighter in 2027 and 2028 than in 2026.
- Micron forecast first-quarter fiscal 2027 revenue of $61.5 billion, plus or minus $1.5 billion.
- The company plans $25 billion in capital spending in the first half of its new financial year.
Mehrotra expects tighter supply through 2028
Mehrotra gave the warning to investors on 30 September, DigiTimes reported. He said Micron had already sold most of the memory it would produce next year and that customers would pay “much higher prices” than this year, according to The Register.
“In calendar 2027 as well as 2028, we see demand exceeding supply,” Mehrotra said on the earnings call. He expects the industry to face greater tightness in both years than in 2026 and said Micron had no line of sight to when supply and demand would return to balance.
Mehrotra said demand for high-bandwidth memory used in AI hardware was growing faster than demand for the DRAM used in servers. Micron is working to improve margins on high-bandwidth memory, which is less profitable than DRAM, The Register reported.
Micron reports 83 percent cloud memory margin
Micron’s cloud memory business unit, which focuses on high-bandwidth memory, reported a fourth-quarter gross margin of 83 percent, against 59 percent in the same quarter a year earlier. The core datacentre unit, which sells more DRAM, recorded a 90 percent gross margin, up from 41 percent, The Register reported.
Datacentre solid-state disk sales reached almost $10 billion for the quarter, an increase of more than 1,000 percent year on year. Micron reported annual revenue of $133.2 billion, against $37.4 billion in the preceding year. Net income rose 895 percent to $85 billion.
For the first quarter of fiscal 2027, Micron forecast revenue of $61.5 billion, plus or minus $1.5 billion, and a gross margin of 86.25 percent. Its fourth-quarter results followed a period in which prices contributed more to revenue growth than shipments: in fiscal third quarter 2026, DRAM prices rose in the low 60s percentage range from the previous quarter while bit shipments grew in the low single digits, Trefis reported on 24 September.
Customer contracts and Micron’s 2028 factories
Micron had signed 16 strategic customer agreements, mostly five-year take-or-pay contracts, Trefis reported before the fourth-quarter results. The agreements covered roughly 20 percent of its DRAM volume and a third of its NAND volume over their term. Micron management said the contracts’ floor prices would keep gross margin well above its peaks in previous cycles.
Those protections have limits. Trefis reported that the largest agreements generally capped prices for existing products at calendar second-quarter 2026 market levels. Management expected fixed-price or capped agreements to cover about 40 percent of revenue once all planned deals were signed. The caps constrain the prices Micron can charge on the covered products even if the broader shortage persists.
Micron plans $25 billion in capital spending in the first half of its new financial year to help bring additional factories online. DigiTimes reported that further cleanroom space was expected from late 2028. Micron plans to bring the factories online in 2028, although its executives warned that they would not immediately improve memory availability or ease prices.
