Micron Warns of Prolonged DRAM Shortage as AI Demand Outpaces Supply

Micron Warns of Prolonged DRAM Shortage as AI Demand Outpaces Supply

Micron has delivered a stark warning for the global DRAM market, stating it will only be able to meet half to two-thirds of customer demand in the coming years. The outlook was shared during Micron’s first earnings call since it discontinued its Crucial consumer memory and SSD brand, highlighting a growing imbalance between supply and demand.

For the first quarter of fiscal 2026, Micron reported record revenue of $13.64 billion, marking a 57% year-over-year increase. The surge was driven largely by higher memory prices and soaring demand from AI data centers, which continue to consume massive volumes of DRAM and NAND. CEO Sanjay Mehrotra confirmed that DRAM supply constraints are expected to persist beyond 2026, echoing concerns across the wider memory industry.

A key factor behind the shortage is the rapid expansion of High Bandwidth Memory (HBM), which requires roughly three times more wafer capacity than DDR5. Micron expects strong growth in HBM revenue and projects the HBM total addressable market to reach $100 billion by 2028, surpassing the entire DRAM market size in 2024.

Despite exiting the Crucial brand, Micron will continue supplying memory for PCs and smartphones. However, the company admitted it is “disappointed” it cannot meet demand across all segments, even as PC shipments are expected to grow.

Micron is expanding manufacturing with new fabs in Idaho, expected to begin production in mid-2027, and a planned New York fab targeted for production around 2030. Still, customers are already securing multi-year supply contracts, concerned about long-term access to memory.

Meanwhile, DDR5 prices remain elevated, with mixed industry forecasts on when relief may arrive, underscoring continued pressure for consumers and PC builders.