Memory Shortage to Persist Beyond 2026 Due to AI Demand, Says Micron

Micron, a prominent global memory manufacturer, has declared that the scarcity of memory components is expected to extend beyond 2026. This prolonged shortage is primarily attributed to the soaring demand from the artificial intelligence (AI) industry, which current manufacturing capabilities are struggling to match.

Micron's CEO, Sanjay Mehrotra, highlighted during a recent earnings call that the relentless and robust industry demand, coupled with existing supply limitations, is creating a constrained market. He explicitly stated that these conditions are anticipated to persist for several years, past 2026. This sentiment is echoed by other major players in the memory market, such as Samsung and SK Hynix, who also foresee ongoing supply challenges. The production of new memory manufacturing facilities is a lengthy process, and while efforts are underway to expand capacity, the pace of AI-driven demand continues to outstrip supply growth. Furthermore, manufacturers are cautious about the risk of overcapacity, prioritizing long-term profitability over rapid, potentially unsustainable expansion.

The financial results for Micron's first fiscal quarter underscore this trend, with reported revenues of $13.6 billion, marking a significant increase of 21% from the previous quarter and 57% year-over-year. A substantial portion of this growth, specifically $10.8 billion, was generated from DRAM sales, encompassing high-bandwidth memory (HBM), GDDR, and DDR chips, which saw a 69% increase compared to the prior year. In contrast, NAND shipments only rose by 22%. This disparity helps explain the considerable price hikes observed in RAM kits, with some now costing more than graphics cards, while SSDs have experienced more moderate price increases. Mehrotra emphasized the indispensable role of memory in the burgeoning "AI experience," from data centers to various edge devices like smartphones and PCs. He concluded that AI is unequivocally driving an increased need for memory content and capacity as customers advance their technological roadmaps.

The ongoing memory scarcity underscores the rapid technological advancements in AI and its profound impact on hardware infrastructure. This situation serves as a powerful reminder of the interconnectedness of technological progress and supply chain dynamics, urging innovation and strategic planning to meet the demands of an increasingly AI-driven world. The challenges faced by memory manufacturers highlight the critical balance between meeting immediate demand and ensuring sustainable growth within the technology sector.