Memory shortage to worsen through 2027-2028, Micron CEO

Micron's chief executive has issued a stark warning that memory availability will deteriorate further over the next two years, with supply unable to keep pace with demand driven primarily by artificial intelligence expansion.

During the company's fourth-quarter earnings presentation, Sanjay Mehrotra repeatedly emphasized that memory and storage supply-demand conditions will grow much tighter in 2027 and 2028 compared to 2026. He stated that demand is expected to exceed supply during that period and that the company does not currently foresee when supply will catch up with demand. The executive attributed the tightening primarily to the accelerating need for AI infrastructure, including demand for larger models, more sophisticated agents, and expanded context windows.

Mehrotra also explained the structural challenges preventing rapid capacity expansion. Manufacturing clean rooms require extensive time to construct, and even after they become operational, production ramps up gradually. This lengthy timeline means new fabrication facilities cannot quickly address supply shortages.

Micron is not alone in sounding this alarm. Samsung issued a similar warning this week, noting that demand for high-bandwidth memory—the specialized chips used in AI accelerators—is surging and will consume an additional 10 percent of the company's manufacturing capacity next year. Since fabrication capacity is finite and new facilities take years to build, this reallocation of resources away from traditional DRAM production will further constrain memory supply for consumer and enterprise applications.

The implications extend beyond memory prices. Ongoing supply constraints and higher costs will influence product launches and manufacturer suggested retail prices across multiple categories. The technology industry expects two new generations of graphics processors, next-generation gaming consoles, and numerous CPU releases from major manufacturers within this timeframe—all of which depend on adequate memory supplies.

However, not all industry voices agree with the severity of the shortage narrative. Acer's chief executive recently stated that a memory crisis lasting until 2030 is implausible and suggested that some messaging around supply constraints may be designed to maintain profit margins and support stock valuations. Investor Michael Burry, known for his role in the 2008 financial crisis, has similarly questioned the durability of the AI-driven demand surge, citing accelerating timelines for shortage resolution and the possibility that the artificial intelligence sector's expansion may decelerate sooner than widely anticipated.