SEOUL, October 01 (AJP) - Micron Technology’s record earnings and unusually bullish outlook reinforced expectations that an AI chip windfall will extend the record earnings streak for the three memory majors, including Samsung Electronics and SK hynix, through 2027 and into 2028.
The U.S. memory chipmaker reported fiscal fourth-quarter revenue of $54.23 billion, up 31 percent from the previous quarter and nearly fivefold from a year earlier. Non-GAAP operating income reached $44.64 billion, giving Micron an operating margin of 82.3 percent.
For its bigger Korean counterparts, the more consequential numbers came from Micron’s outlook and its earnings call early Thursday Korea time.
Micron forecast revenue of $61.5 billion, plus or minus $1.5 billion, for the current quarter, comfortably above Wall Street’s estimate of about $57 billion. It expects adjusted gross margin of about 86.25 percent and adjusted earnings of $38.15 per share, plus or minus $1.
The bullish figures, however, offered little relief to Korean chip stocks as investors in Seoul fretted over the continued surge in U.S. Treasury yields. Both Samsung Electronics and SK hynix were mostly flat in early Thursday trading.
Micron projected even more supply-side favorable conditions over the next two years.
“We expect memory and storage supply-demand conditions to be much tighter in calendar 2027 and 2028 than they were in 2026,” Micron Chief Executive Sanjay Mehrotra said during the earnings call.
Micron expects the DRAM industry to remain supply-constrained in both years, even as industry bit shipments grow at annual rates in the low-20 percent range.
High-bandwidth memory (HBM) shipments are expected to grow faster than conventional DRAM through 2028, further tightening supply because HBM consumes considerably more wafer capacity.
“We do not have line of sight to when supply and demand will return to balance,” Mehrotra said.
The assessment matters directly to Samsung and SK hynix, which from an oligopoly with Micron in the global DRAM market and vie to supply the rapidly expanding market for HBM used in AI accelerators.
In its Sept. 29 report, market tracker TrendForce raised its forecast for HBM’s blended average selling price in 2027 to a 121 percent year-on-year increase.
The projection echoes persistent supply constraints voiced by the suppliers, a growing share of higher-priced HBM4 and a heated race toward next-generation HBM technology that is putting further pressure on limited production capacity.
TrendForce said expanding AI server demand is keeping HBM and conventional DRAM in competition for limited advanced-process and wafer capacity. Improving yields and ramping up next-generation products will take time, keeping supply tight through 2027.
Micron’s order book suggests customers are increasingly unwilling to wait for additional capacity.
More than 75 percent of the company’s fiscal 2027 shipments have already been committed, allowing Micron to shift some customer allocation discussions into 2028, executives said.
Financial commitments under its long-term Strategic Customer Agreements have climbed to $32 billion from $22 billion in June. Remaining performance obligations, representing contracted revenue yet to be recognized, have risen to about $150 billion from roughly $100 billion in the previous quarter.
HBM is even tighter. Micron said it has completed agreements covering the vast majority of its calendar 2027 HBM bit supply at prices significantly higher than those negotiated for 2026.
“For 2027, a large part of the volume is already sold out for 2027 for HBM, and the prices are much higher than 2026 prices,” Mehrotra said.
The combination of committed volumes and higher pricing strengthens the earnings outlook for Samsung and SK hynix ahead of their own third-quarter results.
Both Korean companies have been expanding long-term agreements with major AI and cloud customers seeking to secure memory capacity years in advance.
SK hynix said in July that it had completed long-term agreements with around 10 key customers and was discussing additional multiyear contracts with other major clients. Samsung has also been increasing its use of long-term supply agreements.
The two companies are already expected to report another exceptionally profitable quarter.
Recent FnGuide estimates put Samsung Electronics’ third-quarter operating profit above 100 trillion won ($70 billion), while SK hynix is expected to generate roughly 70 trillion won or more. Samsung Electronics releases its earnings guidance next week.
Micron’s outlook suggests the bigger question may no longer be whether the current quarter sets another record, but how far into 2027 and 2028 the favorable pricing environment can extend.
As HBM absorbs more manufacturing capacity, less remains available for conventional server, PC and mobile memory.
Mehrotra said the transition from HBM3E toward HBM4 and HBM4E would create additional “headwinds with respect to supply growth,” while future DRAM process transitions are providing smaller productivity gains per wafer.
The shortage and rising costs are also beginning to influence AI chip designs.
According to TrendForce, graphics processor and custom AI chip developers are considering HBM stacks with eight DRAM layers instead of the previously planned 12. Using fewer layers lowers memory capacity and cost per stack, allowing a given amount of HBM production to support more processors.
The shift reflects supply and cost constraints rather than weakening end-market demand, the research firm said.
But thinner stacks bring their own cost penalty. Each still requires a base die, whose cost is spread across less memory capacity. TrendForce expects eight-layer products to command a roughly 10–20 percent price premium per gigabit over 12-layer versions in 2027.
Such changes could ease the total cost of individual AI processors, but are unlikely to reverse the broader rise in HBM prices.
Building new fabs offers no quick fix either.
Micron is expanding capacity across the United States, Japan, Taiwan and Singapore, but much of that production will take years to reach meaningful volumes. Its first Idaho expansion is expected to begin wafer output around mid-2027, with additional capacity in Japan and the United States arriving later.
Even after new cleanrooms begin production, output increases only gradually, Mehrotra told analysts.
Demand, meanwhile, continues to expand. Micron expects server unit shipments to grow in the high teens in both 2026 and 2027. Larger AI models, longer context windows, more simultaneous users and the spread of AI agents are also increasing memory requirements per system.
The boom extends beyond HBM.
Micron’s data-center solid-state drive revenue approached $10 billion in the latest quarter, more than 10 times its level a year earlier, as AI systems increasingly use NAND storage for tasks such as offloading cached data used during inference.
For Samsung, that broadening demand could be particularly significant because its memory portfolio spans HBM, conventional DRAM and NAND. For SK hynix, Micron’s comments reinforce the value of its established HBM position as customers reserve next-generation capacity before it reaches mass production.
A sharp slowdown in AI infrastructure spending could eventually weaken demand, while aggressive capacity expansion could loosen supply further out. For now, Micron expects the shortage to persist.
“As we noted, in calendar 2027 as well as 2028, we see demand exceeding supply,” Mehrotra said. “Overall, supply-demand environment is only getting tighter.”
For Samsung and SK hynix, the results suggest the shortage underpinning Korea’s record chip profits has years left to run.
AJP Takeaways
- Micron expects memory supply-demand conditions to tighten further through 2027 and 2028, with DRAM remaining supply-constrained as AI and HBM demand absorbs more production capacity.
- More than 75 percent of Micron's fiscal 2027 shipments are already committed, while the vast majority of its 2027 HBM supply has been secured at significantly higher prices than in 2026.
- The outlook strengthens expectations for an extended earnings boom at Samsung Electronics and SK hynix, with both Korean chipmakers already forecast to post record or near-record third-quarter profits.
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