Micron Hits Record 80% Margin Amid DRAM Shortage

Micron Technology achieved a record operating margin exceeding 80% for the first time, driven by a surge in demand for DRAM and high-bandwidth memory chips. This growth stems from AI hyperscalers investing hundreds of billions of dollars into data centers, causing chip prices to skyrocket and creating a supply shortage that has forced some data center buyers to ration memory supplies.

Some customers are currently receiving only half of their requested memory. The scarcity is exacerbated by High Bandwidth Memory, which consumes disproportionately more wafer capacity than conventional DRAM. Management indicates that market tightness will persist until at least 2027, with projections suggesting 2027 will be tighter than 2026.

To mitigate the volatility of the historically cyclical memory chip industry, the company has secured multiyear Strategic Customer Agreements. These contracts lock in sales volumes and establish pricing floors to protect margins against future market downturns. Combined with a projected AI build-out lasting through 2030, these measures are expected to support strong margins even as new production facilities come online between mid-2027 and 2028.