Micron CEO: Memory Shortage to Last Through 2028

Micron Technology's CEO, Sanjay Mehrotra, forecasts that the tight supply of memory chips will persist through 2028. This outlook is bolstered by strategic customer agreements, with 26 multi-year take-or-pay contracts already in place. These agreements guarantee a significant portion of Micron's future revenue, extending through 2030.

The demand for high bandwidth memory, essential for AI processors, is particularly strong, with much of the 2027 supply already committed. Mehrotra indicated that next year's volumes will command substantially higher prices compared to 2026.

Micron is projecting robust financial performance, with estimated revenue of $61.5 billion for the current fiscal quarter and expectations for fiscal 2027 to be another record year. The company is actively expanding its manufacturing capacity, though a potential imbalance between supply and demand is not anticipated for several years.

Despite the company's positive trajectory and strong earnings growth projections, Micron's stock currently trades at a low valuation. Analysts predict substantial earnings per share growth for fiscal years 2027 and 2028, suggesting potential for further stock appreciation for investors who can tolerate market volatility.