Micron explicitly states for the first time that supply will be tighter in 2027-2028, with four major bases simultaneously expanding HBM production.

Micron explicitly states for the first time that supply will be tighter in 2027-2028, with four major bases simultaneously expanding HBM production.

Micron Technology's latest quarterly revenue and profit both exceeded market expectations, but what is more noteworthy than the performance itself is management's assessment of long-term supply and demand: the company has for the first time clarified that HBM capacity supply in 2027 and 2028 will be tighter than in 2026 , and at the same time, it will expand HBM production at its four major manufacturing bases in Taoyuan, Taichung, Tongluo and Tainan in Taiwan.

According to a report by Taiwan's DigiTimes on October 2nd, Micron's Vice President of DRAM Front-End Manufacturing in Asia and Chairman of Micron Taiwan, Tung Hui-lu, confirmed that AI is driving strong demand for memory, and the company is simultaneously expanding production at its four major bases. The most significant piece of incremental information in this financial report is the explicit extension of the supply shortage assessment to 2027-2028.

This statement elevates the supply constraints of HBM from a short-term narrative to a medium-term structural assessment. Its direct implication is that even if the entire industry is expanding production, the strong price cycle of HBM may still last longer than previously expected, and the support period for the profit center of storage manufacturers will also be extended accordingly.

Analysts believe that Micron's proactive warning of tighter supply amid better-than-expected earnings not only endorses its own expansion strategy but also implies that downstream AI chip manufacturers will continue to face a tight pricing environment in 2027 and 2028.

Meanwhile, Morgan Stanley released a new research report pointing out that Micron Technology's latest quarterly results were largely in line with previous expectations. Although the sequential improvement slowed down, the strong resilience of the business remained evident.

More importantly, the company extended its qualitative supply and demand guidance to 2028, and expects the memory supply and demand relationship to be even tighter in 2027 and 2028 than this year. The bank believes this signal may not be fully priced in by investors in the short term, but it aligns with its assessment that the intensity of AI demand will reshape the memory industry. Morgan Stanley maintains its "overweight" rating on Micron with a target price of $1200.

Tensions are expected to extend into 2028 for the first time.

Micron's revenue and profit for the fourth fiscal quarter of 2026 both exceeded expectations. More significant than the earnings figures were the company's statements regarding the long-term supply and demand landscape – capacity supply in 2027 and 2028 will be tighter than in 2026.

This assessment aligns with previous statements from management. Micron CEO Sanjay Mehrotra previously stated that AI-driven storage demand is extending the supply-demand imbalance beyond 2027, with data center customers currently indicating a purchasing intention of approximately 150% of the company's committable supply—meaning demand exceeds supply by about 50%. Long lead times for new wafer fabs and limitations on skilled workers and energy infrastructure make it difficult for supply to quickly keep pace with demand.

Taiwan's four major production bases are expanding production simultaneously.

Micron disclosed that it is simultaneously expanding HBM production at its four major manufacturing bases in Taoyuan, Taichung, Tongluo, and Tainan, Taiwan. Dong Huilu confirmed that AI is the core driver of this expansion. The company did not disclose the specific scale of expansion or the commissioning time for each base.

Taiwan is a crucial hub for Micron's HBM capacity expansion. Previous industry reports indicated that Micron planned to increase its HBM monthly capacity to approximately 100,000 wafers by the end of the year, nearly doubling last year's figure. The HBM packaging business will primarily be carried out at its Tongluo plant in Taiwan. These simultaneous actions across its four major sites demonstrate that Micron is establishing Taiwan as the core base for HBM capacity expansion.

In the HBM market, Micron has long held the third position. According to data from market research firm Counterpoint Research, in the second quarter of this year, SK Hynix led the global HBM market with 50%, followed by Samsung Electronics with 32% and Micron with 18%.

Micron is accelerating its efforts to catch up. The company has already begun mass production of its HBM4 for Nvidia's Vera Rubin platform and plans to mass-produce HBM4E next year. Simultaneously, it has secured long-term demand through five-year strategic customer agreements, having signed contracts with 16 customers by the end of June, with planned capital expenditures exceeding $25 billion in fiscal year 2026. If supply does indeed tighten further in 2027-2028, customers who have secured capacity in advance will receive priority supply, and Micron's market share ranking is expected to move further upward.

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