- Micron CEO says company is unable to meet current demand
- DRAM production is being prioritized for AI and datacenters
- Consumers are reeling for the cheap RAM of yesteryear
Micron Technology Inc. CEO Sanjay Mehrotra has said that the company “are only able to supply, for our key customers in the midterm, about 50% to two-thirds of their requirements.”
Mehrotra’s statement reflects the growing demand by datacenters for components related to AI compute that will likely worsen the supply of memory.
The CEO added that, in order to meet the demand, the company will have to spend heavily on production.
RAM crisis not easing any time soon
Mehrotra’s statements come after Micron reported excellent Q2 earnings, largely driven by datacenters looking for components to fill the ever growing demand for AI with specific reference to high-bandwidth memory - namely Dynamic Random Access Memory (DRAM) and NAND memory.
But demand has massively outstripped supply, with Mehrotra stating that, “We are only able to supply, for our key customers in the midterm, about 50% to two-thirds of their requirements,” Mehrotra told CNBC’s “Squawk on the Street.”
Mehrotra also added that there is currently an “unprecedented gap between supply and demand” and that “we continue to expect supply-demand conditions for both DRAM and NAND to remain tight beyond calendar 2026.”
This has been the catalyst for the ‘RAM crisis’ being experienced by consumers, with manufacturers shifting production to cater to the more profitable demands of AI, which has spiked memory prices across the board. TrendForce predicted that the price of DRAM will likely double quarter-over-quarter in its 1Q2026 memory industry survey.
Storage in general to take a hit
As the production of DRAM and NAND share similar production environments, resources intended for the production of NAND memory are being cannibalized by DRAM production, especially as DRAM commands a far higher margin for profit.
This has had a further knock on effect for investment in NAND production, with the remaining supply being hoovered up by enterprise demand for high-speed memory.
But the knock-ons don’t end there. The lack of RAM supply is also forcing new devices such as mobile phones and laptops to ship with what is widely considered to be the bare minimum in RAM, forcing software developers to cater to the reduced memory provisions - resulting in an increase in the use of virtual memory.
Virtual memory uses a portion of the storage of a device's Solid State Drive (SSD) as a RAM surrogate. The constant writing and re-writing of temporary data to the SSD can cause it to fail far faster than its warranty would suggest, adding an additional cost to the consumer on top of the increased price of devices.
China to seize the opportunity?
There is however an opportunity for smaller firms, especially those in China, to fill the gap in the market. Several Chinese firms have fast-tracked construction timelines for new NAND and DRAM production facilities.
Yangtze Memory recently pushed up the completion of its Wuhan Phase III NAND plant from 2027 to the second half of 2026, and ChangXin Memory is in the process of expanding its Shanghai DRAM facility to an output of 300,000 wafers per month by late 2026.
The good news for consumers - especially now that the US has removed both companies from its restriction list - is that the market could soon see an influx of cheaper and higher capacity DRAM and NAND memory. The only caveat being that the products won’t be from a recognizable brand name, so time will only tell how it holds up in quality.
