TL;DR
Micron told investors that memory and storage demand driven by AI build-outs will outpace industry supply for the foreseeable future. The company reported sharply higher quarterly revenue and profit and expects continued strong margins as it ramps new fabs and HBM4 production.
What happened
In its Q1 2026 earnings report Micron said industry memory supply will remain well short of demand amid a surge in AI-related purchases. CEO Sanjay Mehrotra attributed the gap to customers’ AI data-center build-outs and broader changes in how devices and services use memory and storage. Micron posted $13.64 billion in revenue for the quarter, up from $8.7 billion a year earlier, and net income rose to $5.2 billion. Earnings per share exceeded analyst expectations, and the company projected $18.7 billion in revenue for Q2, a figure that would represent roughly 133% year-over-year growth if realized. Micron is bringing new fabrication plants online in 2026 and 2027 and said work on HBM4 is progressing, with yields improving and higher volumes likely beginning in Q2. The company also signaled robust near-term gross margins in the high 60s percent range.
Why it matters
- Persistent memory shortages could keep prices elevated for servers and enterprise storage, affecting IT procurement budgets.
- Memory-makers prioritizing high-bandwidth products for AI may reduce availability of other memory types for PCs and consumer devices.
- Stronger pricing and sustained demand are boosting Micron’s revenue and profit outlook, altering competitive dynamics in the industry.
Key facts
- Micron said aggregate industry supply will remain substantially short of demand for the foreseeable future.
- Q1 2026 revenue: $13.64 billion, up 56% from Q1 2025’s $8.7 billion.
- Q1 2026 net income: $5.2 billion versus $2 billion a year earlier.
- Reported earnings per share: $4.78, above the expected $3.94.
- Micron forecasted Q2 revenue of $18.7 billion, a potential ~133% year-over-year increase.
- Company expects gross margin around 67–68% for the next quarter.
- New Micron fabs are being built and are expected to begin making memory in 2026 and 2027.
- Micron reports HBM4 development is progressing with yields improving and increased production likely from Q2.
- Major server-makers have warned they may need to raise prices by as much as 15% due to higher memory costs.
What to watch next
- Whether Micron’s new fabs meet their 2026–2027 start dates and ramp as planned (confirmed in the source).
- Progress in HBM4 yields and the timing of increased volume beginning around Q2 (confirmed in the source).
- How sustained memory shortages affect server and enterprise pricing beyond the near term (confirmed in the source).
- Whether overall industry capacity catches up to demand and eases shortages (not confirmed in the source).
Quick glossary
- DRAM: Dynamic Random-Access Memory, a common form of volatile memory used in computers and servers for active data storage.
- HBM (High-Bandwidth Memory): A type of memory designed to provide very high bandwidth for GPUs and AI accelerators, typically used in data-center and high-performance applications.
- Fab: A semiconductor fabrication plant where integrated circuits and memory chips are manufactured.
- SSD: Solid-state drive, a storage device using flash memory that offers faster access speeds than traditional hard disks.
Reader FAQ
Will memory shortages continue?
Micron told investors it expects industry supply to remain substantially short of demand for the foreseeable future.
Are prices for servers likely to rise?
Major server-makers have warned that higher memory prices could force them to raise prices by up to about 15%.
When will Micron’s new fabs start producing memory?
Micron said its new fabrication plants will begin making memory in 2026 and 2027.
Is Micron benefiting financially from the current market?
Yes — Micron posted significant revenue and profit gains in Q1 2026 and expects strong gross margins in the next quarter.
SYSTEMS 16 Micron says memory shortages are here for the foreseeable future Even with its new fabs coming online, demand will exceed supply Simon Sharwood Thu 18 Dec 2025 // 02:41 UTC Memory-maker Micron…
Sources
- Micron says memory shortages are here for the foreseeable future
- Micron says memory shortage will 'persist' beyond 2026
- Global Memory Shortage Crisis: Market Analysis and the …
- Memory shortages expected to continue beyond 2026 says …
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