Memory supplier leverage tightened further on October 3 after Micron Chief Executive Officer Sanjay Mehrotra confirmed that over 75% of fiscal year 2027 shipment volume is already committed to customers, with the supply-demand imbalance projected to worsen through 2028.

Speaking on Micron's fiscal Q4 2026 earnings call on September 30, Mehrotra rejected the notion of an approaching memory peak. "We expect demand to outpace supply not only in 2027 but also in 2028," he said, "and in fact, the supply-demand imbalance is likely to worsen in 2027 and 2028 compared to 2026."

The forecast aligns Micron with Samsung Electronics and SK hynix in projecting multi-year tightness across DRAM and high-bandwidth memory (HBM), driven by AI data center build-outs and the diversion of wafer capacity into HBM stacks.

How tight is the supply situation?

One industry insider described customer access as effectively rationed. "Our capacity is so full that we can't even meet with some customers," the source said. "As demand continues to surge, the only immediate option is to maximize supply as much as possible."

KB Securities research analyst Dahyun Kang framed 2027 as a synchronized expansion year. "In 2027, we anticipate an across-the-board growth phase characterized by both rising prices and increasing shipments of HBM and general-purpose memory," Kang said.

What did Q2 2026 earnings reveal?

Samsung Electronics posted record quarterly results for Q2 2026:

• Consolidated sales: 171.5 trillion won
• Consolidated operating profit: 89.4924 trillion won
• Device Solutions division sales: 127.5 trillion won
• DS division operating profit: 89.2 trillion won

The memory business within DS delivered its highest-ever quarterly sales and operating profit.

SK hynix also booked its best quarter on record:

• Sales: 79.3187 trillion won
• Operating profit: 60.5426 trillion won

Both companies signaled continued sequential improvement in Q3, citing sustained AI memory demand and rising contract prices.

Where is the new capacity going?

Samsung has stated that the supply shortfall will persist through 2028 and is expanding long-term supply agreements (LTAs) to anchor customer commitments. SK hynix is broadening DRAM production at the Cheongju M15X and the Yongin Semiconductor Cluster, with additional investment earmarked for the planned Cheongju M17 site.

The long lead time from investment decision to mass production in semiconductor fabs means that even accelerated capex will not balance the market in the near term.

Why is HBM squeezing general-purpose DRAM?

HBM manufacturing absorbs wafer allocation that would otherwise serve standard server DRAM, tightening conventional supply. The simultaneous expansion of AI server deployments raises demand for both HBM and server DRAM, pulling the entire product mix into shortage.

When could the upcycle end?

Two variables will govern the cycle's duration: the sustainability of AI-driven memory demand, and the pace at which Samsung's and SK hynix's announced expansions translate into commercial wafer output. Should new capacity outrun demand growth, contract pricing could weaken over the medium term, weighing on profitability.

For now, the supply backdrop supports continued margin expansion. The industry insider's final assessment: "Even if we expand manufacturing facilities, it will take time for actual supply capabilities to increase, so the supply-demand imbalance will likely persist for the foreseeable future."