Micron posts record earnings, says most of next year's HBM already sold out

Micron Technology posted record earnings as the AI market continues to expand, and the company said most of its high-bandwidth memory for next year is already sold out — with supply unlikely to catch up with demand through 2028. The tight supply environment has driven more customers to seek long-term, stable supply agreements, strengthening the chipmaker's cash flow.

Micron disclosed Wednesday (local time) that its fiscal fourth-quarter (June–August) sales reached $54.23 billion, up 30.8 percent from the prior quarter's $41.46 billion. Full-year sales for fiscal 2026 (September 2025–August 2026) came in at $133.19 billion, a 256 percent increase from the previous year and a new annual sales record for the company.

"We expect an even stronger performance in fiscal year 2027," Micron CEO Sanjay Mehrotra said Wednesday. He cited the company's strategic customer agreements, or SCAs — a form of long-term supply contract under which customers commit to purchasing set volumes over an extended period — as a key pillar supporting the durability of its earnings.

Mehrotra said the number of SCAs signed rose from 16 in the second quarter to 26 in the fourth quarter, with the share of revenue covered by such contracts through 2030 expanding from 25 percent to 35 percent. "Customers want SCAs that guarantee stable supply well beyond 2030, and some new agreements extend through 2031 — including two contracts that were extended by one year to run through 2031," he said.

With supply unable to keep pace with demand, more than 75 percent of next year's output has already been contracted, and recent discussions are now focused on 2028 volumes, Mehrotra said. Committed contract value has already surpassed $32 billion, most of it in cash — roughly twice the cash holdings of Apple or Nvidia.

"SCAs are expected to account for approximately 50 percent of fiscal 2030 revenue," Mehrotra said. "This represents a fundamental change in the nature of the industry. Unlike the severe volatility the industry experienced in the past, this is very positive for maintaining industry health."

The surge in long-term contracts reflects expectations that memory supply will remain tight well into 2028. "The memory and storage supply-demand situation in 2027 and 2028 will be significantly tighter than in 2026," Mehrotra said. "We are building factories, but it is difficult to predict when supply and demand will come back into balance."

HBM in particular is expected to see further price increases amid the supply-demand imbalance. "A significant portion of next year's HBM is already sold out, and at prices well above 2026 levels," Mehrotra said, adding that HBM demand growth is expected to outpace that of DRAM across the industry. He said HBM would narrow the margin gap with DRAM through price increases.

NAND is also seeing rapid growth as data center buildouts accelerate alongside AI development. Micron's data center SSD sales reached approximately $10 billion this quarter — more than 10 times the year-earlier figure and accounting for more than two-thirds of total NAND revenue.

Mehrotra also projected a surge in memory demand driven by advances in physical AI. "Level 4 and above autonomous vehicles typically require more than 200 gigabytes of memory and several terabytes of storage — more than 10 times the capacity of current Level 2-plus and Level 3 semi-autonomous vehicles," he said. "Humanoid robots are expected to require similar levels of memory and storage as autonomous vehicles. Physical AI will be a major demand driver through 2030."