Memory shortage deepens, extending boom for Korean chipmakers

Micron Technology expects the global memory shortage to worsen through 2028, with more than 75 percent of its planned fiscal 2027 output already committed to customers, adding weight to expectations that the current memory boom could run longer for Samsung Electronics and SK hynix.

The US memory chipmaker said Wednesday that fiscal fourth-quarter revenue reached a record $54.23 billion, nearly five times the $11.32 billion reported a year earlier and above Wall Street expectations.

Chief Executive Sanjay Mehrotra said demand had strengthened since the company's previous earnings call and that memory and storage supply-demand conditions would be "much tighter" in fiscal 2027 and 2028 than in 2026.

Micron also said more than 75 percent of its total fiscal 2027 output was already committed, with customer discussions increasingly moving to supplies for 2028.

Customers are also locking in memory further in advance. Micron now has 26 strategic customer agreements, up from 16 in June, with some extending through 2031. The contracts are expected to account for more than 35 percent of the company's revenue through 2030, while related customer financial commitments have risen to $32 billion.

Micron said the agreements provide "added confidence in the durability" of its financial performance.

Samsung Electronics made a similar call on supply in July, saying the memory shortage could persist through 2028. The company had signed long-term agreements with five major global data-center customers and was close to completing talks with another five. If those deals are completed, long-term contracts are expected to cover roughly 60 to 70 percent of its medium- to long-term memory capacity.

SK hynix said the same month that it had completed long-term supply negotiations with about 10 customers, including key clients, with contracts generally running for around five years.

The shortage has also spread beyond high-bandwidth memory used in AI accelerators. As memory makers allocate more advanced DRAM capacity to HBM, conventional server, PC and mobile memory has remained tight, helping push up prices across the broader market.

Those higher prices are being reflected in third-quarter earnings expectations for the Korean chipmakers.

FnGuide data as of Wednesday put Samsung Electronics' operating profit consensus at 110.3 trillion won ($81.1 billion), about 23 percent above the previous quarter's 89.5 trillion won. If met, it would mark the company's first quarterly operating profit above 100 trillion won.

SK hynix is expected to post 78.1 trillion won, up about 29 percent from the previous quarter's 60.5 trillion won and another quarterly record. Combined, the two companies are expected to earn about 188.3 trillion won, roughly 38 trillion won more than in the second quarter.

Some brokerages remain slightly more cautious. DS Investment & Securities forecasts 104 trillion won for Samsung and 70 trillion won for SK hynix, citing the stronger won and a slower pace of memory price increases.