- Micron CEO says the company is unable to meet current demand
- DRAM production is prioritized for AI and data centers
- Consumers are reeling from yesteryear’s cheap RAM
Micron Technology Inc. CEO Sanjay Mehrotra has said that the company “is only able to supply, to our key customers in the medium term, about 50% to two-thirds of their needs.”
Mehrotra’s statement reflects the growing demand from data centers for components related to AI computing, which is likely to worsen memory supply.
The CEO added that to meet demand, the company will have to spend heavily on production.
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The RAM crisis is not abating any time soon
Mehrotra’s comments come after Micron reported excellent earnings in the second quarter, mainly driven by data centers looking for components to meet the ever-growing demand for artificial intelligence 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’re only able to supply, to our key customers in the medium term, about 50% to two-thirds of their needs,” 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 and demand conditions for both DRAM and NAND to remain tight beyond calendar 2026.”
This has been the catalyst for the ‘RAM crisis’ that consumers are experiencing, where manufacturers have shifted production to meet the more profitable demands of AI, which has increased memory prices across the board. TrendForce predicted that the price of DRAM is likely to double quarter-on-quarter in its 1Q2026 memory industry survey.
Storage in general to take a hit
Since the production of DRAM and NAND share similar production environments, resources intended for the production of NAND memory are cannibalized by DRAM production, especially since DRAM has a much higher margin for profit.
This has had a further knock-on effect for investment in NAND production, with remaining supply being snapped up by corporate demand for high-speed memory.
But the influences don’t end there. The lack of RAM supply also forces new devices such as mobile phones and laptops to ship with what is commonly considered the bare minimum in RAM, forcing software developers to take into account the reduced memory provisions – resulting in an increase in the use of virtual memory.
Virtual memory uses a portion of the storage on a device’s Solid State Drive (SSD) as a RAM surrogate. The constant writing and rewriting of temporary data to the SSD can cause it to fail much faster than its warranty suggests, adding an extra cost to the consumer on top of the increased cost of devices.
China to seize the opportunity?
However, there is an opportunity for smaller companies, 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 accelerated the completion of its Wuhan Phase III NAND fab from 2027 to the second half of 2026, and ChangXin Memory is expanding its Shanghai DRAM facility to production of 300,000 wafers per month by the end of 2026.
The good news for consumers — especially now that the U.S. has removed both companies from its restriction list — is that the market could soon see an influx of cheaper, higher-capacity DRAM and NAND memory. The only caveat is that the products do not come from a recognizable brand, so only time will tell how it holds up in terms of quality.
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