Micron CEO Sanjay Mehrotra says that RAM shortages will persist into 2028 and perhaps beyond, and customers will pay “much higher prices” than they did in 2026
Context & Ripple Effects
Micron had already signaled a pricing upswing with a forecast for sharply higher fiscal Q2 sales and operating income, while memory producers said in January that they would add capacity cautiously to avoid repeating prior downcycles. That supply discipline is central to Mehrotra's longer shortage forecast.
AI-driven demand has also strained Micron's ability to serve buyers: in February, the company said it could meet only about 50% to 66% of demand for some key customers. The projected duration makes the issue less a short purchasing disruption than a capacity-planning constraint for memory buyers.
First-order effects
- Micron's customers face higher RAM procurement costs than in 2026, giving Micron greater leverage in contract negotiations while supplies stay tight.
- Micron can prioritize available output among customers as demand exceeds what it says it can supply in some segments.
Second-order effects
- PC and phone makers, already facing projected memory shortages, must absorb higher component costs, reduce memory configurations, or seek supply commitments earlier in their product-planning cycles.
- Rival memory producers have an incentive to preserve pricing discipline rather than rapidly add capacity, reinforcing the cautious expansion posture described in January.
Third-order effects
- If producers continue to restrain capacity additions, memory availability becomes a strategic constraint on AI infrastructure and consumer-device production rather than a routinely cyclical component cost.
- The episode points to a more durable split between demand for memory-intensive AI systems and the supply available to broader device markets, with allocation decisions carrying more weight.
The trend: Memory is becoming AI infrastructure whose capacity lag can transmit higher costs and supply constraints into PCs, phones, and other hardware markets.