Micron predicts DRAM crisis until at least 2028

Micron Technology, a major memory chip manufacturer, has issued a long-term forecast indicating that the supply of DRAM (Dynamic Random-Access Memory) chips will remain constrained until at least 2028. This projection suggests that the current tight supply conditions in the memory market are not a short-term phenomenon but rather a structural challenge expected to persist for several years.

This outlook matters because sustained tight supply for DRAM typically leads to increased pricing power for manufacturers. Higher prices for memory chips can significantly boost revenue and profit margins for companies in the semiconductor sector. It signals a potential shift towards a more favorable market environment for memory producers compared to periods of oversupply.

The mechanism behind this predicted crisis is likely driven by a combination of factors, including robust demand from artificial intelligence (AI) applications and ongoing data center buildouts. These sectors require increasing amounts of high-performance memory, outstripping the current and projected manufacturing capacity for DRAM. Expanding production is complex and time-consuming.

This forecast primarily moves memory manufacturers. Micron (MU) itself stands to benefit from sustained pricing power. Competitors like Samsung Electronics (005930.KS) and SK Hynix (000660.KS), also major DRAM producers, are similarly positioned to see improved profitability. Companies reliant on DRAM, such as PC and server manufacturers, could face higher component costs.