Micron Technology Says AI Memory Demand Still Outstrips Supply Through 2026, HBM4 Shipping Early

Core Insights - Micron Technology is experiencing significantly higher demand than supply across memory markets, particularly in DRAM, with tight industry conditions expected to persist beyond 2026 [6][5][1] Supply and Demand - Micron's inventories are lean, especially in DRAM, and supply is not meeting demand by a substantial margin, with key customers only able to meet 50% to two-thirds of their demand [1] - Demand is expected to proliferate beyond data centers to smartphones, PCs, and autonomy-related activities over time [2] - Server demand trends are improving, with expectations shifting from single-digit growth to mid-teens growth due to AI workloads affecting traditional server demand [3] Capacity Expansion - Micron is working to expand capacity through node transitions and greenfield investments, with a focus on multi-year supply agreements for longer-term visibility [5][6] - Supply additions, particularly for greenfield capacity, take time, and node transitions are less efficient than before, limiting incremental supply generation [7] - Micron is ramping its 1-gamma DRAM node, expected to provide supply into calendar 2026, and has plans for new capacity in Idaho and Singapore [10] High-Bandwidth Memory (HBM) - Micron is in high-volume production of HBM4, with customer shipments commencing and expectations for ramping shipment volumes in calendar Q1 [11] - The company has sold out its calendar year 2026 HBM supply, with HBM4 yields on track and delivering over 11 Gbps speeds [12] - Increasing silicon intensity of HBM is tightening supply, with a trade ratio historically around 3-to-1 for HBM3, which increases with newer HBM generations [8] Financial Outlook - Micron has guided to a 68% gross margin, with an improved financial outlook driven by pricing and strong cost performance from the 1-gamma ramp [14][15] - The company expects margins to expand from the fiscal second quarter into the third quarter, with premium technology and portfolio providing flexibility for higher-value optimization [15] NAND Market Position - Micron holds a preeminent position in NAND, focusing on the data center SSD market and has gained share, discussing achieving over a billion-dollar run rate in NAND [17] - Tighter NAND market conditions are emerging as storage becomes more integral to AI system architecture, prompting Micron to add greenfield NAND capacity in Singapore [18] Strategic Investments - Micron is committed to disciplined investments, reassessing market conditions and competitive capacity additions while expanding supply and securing longer-term agreements with customers [20]