In a series of landmark statements in December 2025 and January 2026, Micron Technology CEO Sanjay Mehrotra warned that the global DRAM supply shortage is no longer a cyclical blip but a structural deficit that will likely persist well beyond 2026.
The “AI Memory Supercycle” has fundamentally rewired the industry, shifting the focus from abundant consumer RAM to high-margin, high-density components for data centers.
The “Half-Capacity” Crisis
During Micron’s Q1 FY2026 earnings call on December 17, 2025, Mehrotra revealed that the company can currently only meet half to two-thirds of the total demand from its key customers.
- 2026 is “Sold Out”: Micron has already finalized price and volume agreements for its entire calendar 2026 HBM (High Bandwidth Memory) supply.
- The HBM “Tax”: HBM4 and HBM3E require three times the wafer area of standard DDR5.5 Every HBM chip produced for an AI server effectively “steals” the silicon capacity of three traditional PC RAM modules.
- Inventory Depletion: Industry analysts at IDC and TrendForce report that both DRAM and NAND supply growth in 2026 will remain significantly below historical norms, keeping inventory levels at “critically low” stages.
Why the Shortage Extends Beyond 2026
The gap between demand and supply is widening due to the extreme lead times required to build new infrastructure.
| Project / Factor | Timeline for Relief | Impact |
| Idaho Fabs (ID1 & ID2) | Mid-2027 to 2028 | Initial production targeted for 2027, but “meaningful” volume isn’t expected until 2028. |
| New York Megafab | 2030+ | Groundbreaking occurred Jan 16, 2026; will eventually produce 40% of Micron’s DRAM. |
| HBM4 Transition | Mid-2026 Ramp | While advanced, it is even more wafer-intensive, further tightening standard DRAM supply. |
| Powerchip P5 Acquisition | Late 2027 | Micron’s $1.8B acquisition of a Taiwan fab (Jan 2026) won’t see output until late 2027. |
Market Consequences: The End of “Cheap” RAM
The structural shortage is causing a dramatic decoupling of memory prices from traditional consumer cycles:
- Price Hikes: Analysts forecast that DRAM and NAND prices could rise by another 20% in 2026, following a year where some DDR5 costs already doubled.
- Edge AI Demands: The launch of “AI-first” operating systems for laptops and smartphones in late 2025 is forcing manufacturers to double base RAM (from 8GB to 16GB or 32GB) just as supply is hitting its tightest point.
- The “Crucial” Pivot: In a major move to prioritize AI, Micron announced it is shuttering its Crucial consumer brand by late January 2026 to reallocate all remaining retail capacity to enterprise-grade AI buildouts.
Conclusion: A Multi-Year “Drought”
Micron’s outlook suggests that for DIY PC builders and enterprise procurement teams, the era of abundant, low-cost memory is over for the medium term. As the industry prioritizes hyperscalers like NVIDIA and Microsoft, the “trickle-down” of supply to the consumer market is unlikely to normalize until at least 2028, when the next generation of US-based mega-fabs finally begins volume production.
