Micron Warns Prolonged Memory Crunch Will Outlast 2027 as AI Squeezes Global Supply Chains

Micron Technology ($MU) delivered record fiscal fourth-quarter results alongside a stark warning on chronic industry-wide memory shortages, cautioning that structural imbalances across DRAM and NAND will tighten further into fiscal 2027 and 2028 with no clear end in sight.
Management's forward guidance and supply outlook highlight key operational shifts across the semiconductor ecosystem:
• Historic Top-Line Expansion: Fiscal Q4 revenue surged 379% year-over-year to $54.23 billion with adjusted EPS reaching $33.42, driven by an extraordinary 87% gross margin. Full-year revenue reached $133.19 billion (+256% YoY), reflecting relentless datacenter and High-Bandwidth Memory (HBM) absorption.
• Severe Multi-Year Supply Bottlenecks: CEO Sanjay Mehrotra stated that Micron lacks visibility on when industry capacity will catch up, projecting DRAM bit growth to decelerate from the mid-20% range in 2026 to the low-20% range through 2027–2028 due to production complexities in HBM packaging. CapEx is set to eclipse $50 billion in fiscal 2027 as new greenfield fabs in Idaho and New York face multi-year construction and ramp-up lead times.
• De-Cyclicalization via Strategic Customer Agreements: To mitigate legacy boom-and-bust volatility, Micron expanded its Strategic Customer Agreements (SCAs) to 26 partners with $32 billion in contractual volume commitments, securing price-floor protections covering roughly 35% of projected revenues through 2030–2031.
• Downstream Consumer Margin Squeeze: The acute memory crunch is spilling over into consumer hardware supply chains. Rising component costs—exemplified by estimated iPhone DRAM bill-of-materials jumping from ~$39 to ~$145—are forcing tier-1 OEMs to implement direct retail price increases across flagship smartphone, PC, and consumer electronics lines.