Micron Hits 90% Client Margin as AI Pacts Lock Supply Through 2028

Gamers Nexus

Micron's reallocation of wafer capacity to high-bandwidth AI memory starves retail PC builders and locks in record 90% consumer margins through 2028.

AI-assisted summary of Disgusting Greed of AI Memory Companies: Micron's 90% Margin — original source. Check the original for full context.

Source published: 2026-10-12

Key ideas

Micron reported record fiscal Q4 revenue of $54.2 billion and $133 billion for the full fiscal year, driven by a 1,042% year-over-year explosion in data center revenue. (2:10)
Despite shuttering its direct-to-consumer Crucial brand, Micron's Mobile and Client segment reached a 90% gross margin and an 88% operating margin by capitalizing on premium edge AI devices amidst falling unit volumes. (14:54)
Over 75% of Micron's production capacity for 2027 is already locked down by enterprise hyperscalers, with management expecting industry shortages to worsen through 2028 and some contracts extending past 2030. (8:13)
High Bandwidth Memory (HBM) production requires up to three times the wafer area of standard DDR5, compounding consumer DRAM shortages through complex packaging defects and scrapped multi-die stacks. (22:18)

Detailed notes

## Background Published on YouTube by Gamers Nexus on October 12, 2026, this investigative video is hosted and co-written by Steve Burke. According to the description, it exposes Micron's record-setting 90% consumer profit margin and skyrocketing hardware pricing following the discontinuation of its Crucial brand, alongside corporate disclosures indicating memory shortages will be sustained through 2028 and beyond.

## TL;DR Gamers Nexus details Micron's fiscal 2026 financial earnings, highlighting how the memory supplier achieved an unprecedented 90% gross margin in its consumer client segment despite double-digit shipment declines. Driven by massive enterprise demand for AI hardware and multi-billion-dollar commitments from Nvidia, memory manufacturers are shifting silicon wafer capacity into complex High Bandwidth Memory (HBM) at the expense of standard consumer DRAM. Micron, Samsung, and SK Hynix have locked up production through long-term customer agreements, ensuring artificially high price baselines and severe supply tightness through 2028 and 2030. Steve Burke argues that this unchecked corporate extraction has functionally paralyzed the PC DIY hobby, pricing ordinary builders out while tech firms use extensive political lobbying to avoid regulatory oversight.

## Atmosphere & style The presentation is marked by Steve Burke's trademark blend of biting sarcasm, righteous indignation, and relentless, data-driven scrutiny. Watching the breakdown feels like witnessing a somber post-mortem of the PC DIY building scene, contrasting dry corporate earnings calls and billionaire hubris against the palpable frustration of everyday enthusiasts. The mood oscillates between disbelief at corporate victory laps over 'healthy' fabricated shortages and genuine exhaustion over the extractive economic direction of modern consumer tech.

## Bulletin - [02:10](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=130s) Micron reported record fiscal Q4 revenue of $54.2 billion and $133 billion for the full fiscal year, driven by a 1,042% year-over-year explosion in data center revenue. - [14:54](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=894s) Despite shuttering its direct-to-consumer Crucial brand, Micron's Mobile and Client segment reached a 90% gross margin and an 88% operating margin by capitalizing on premium edge AI devices amidst falling unit volumes. - [08:13](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=493s) Over 75% of Micron's production capacity for 2027 is already locked down by enterprise hyperscalers, with management expecting industry shortages to worsen through 2028 and some contracts extending past 2030. - [22:18](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1338s) High Bandwidth Memory (HBM) production requires up to three times the wafer area of standard DDR5, compounding consumer DRAM shortages through complex packaging defects and scrapped multi-die stacks.

## Key takeaways - [00:00](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=0s) Micron received billions of dollars in public taxpayer subsidies while simultaneously starving the consumer market and generating unprecedented corporate profits. - [00:45](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=45s) Micron's Mobile and Client division gross margins surged from 36% to an exorbitant 90%, with operating margins climbing to 88%. - [02:10](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=130s) Nvidia and Micron closely aligned their technical and production roadmaps, with Nvidia committing $279 billion through 2032 to lock up memory supply and fab capacity. - [03:15](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=195s) Micron operates within an insular global DRAM triopoly alongside Samsung and SK Hynix, while potential Chinese competitor CXMT remains mired in regulatory uncertainty. - [05:39](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=339s) Nvidia consumes roughly 37% of global HBM supply, fueling Micron's rapid expansion of HBM stacks for the next-generation Vera Rubin platform. - [08:13](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=493s) Retail desktop memory prices surged 400% to 500% starting in late 2025, elevating baseline hardware costs across PCs, smartphones, consoles, and automotive systems. - [11:08](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=668s) Micron's single-quarter revenue of $54.23 billion roughly matched the combined quarterly revenues of AMD, Intel, and Broadcom. - [13:30](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=810s) Combined data center revenue at Micron surpassed $80 billion in fiscal 2026, marking a more than ninefold increase from $8.7 billion in fiscal 2024. - [16:25](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=985s) Micron extracts higher gross margins (90%) selling memory to client markets than Nvidia achieves (75%) selling advanced AI accelerators. - [17:49](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1069s) Strategic Customer Agreements (SCAs) cover over 35% of Micron's projected revenue through 2030, establishing fixed price floors that prevent memory prices from dropping. - [21:27](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1287s) Over 75% of Micron's total 2027 manufacturing output is already contracted to enterprise clients, with ongoing negotiations aggressively filling 2028 fab capacity. - [22:18](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1338s) Fabricating HBM consumes 2.3x to 3x the wafer area of standard DRAM, meaning high defect rates in complex packaging destroy dies that could have supplied the consumer market. - [23:41](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1421s) Micron, Samsung, and SK Hynix all forecast severe DRAM supply deficits persisting without relief through at least 2028 to 2030. - [25:58](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1558s) Semiconductor giants have significantly ramped up political lobbying expenditures, leaving consumers with virtually no regulatory protection against cartel-like pricing power. - [28:40](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1720s) Extravagant memory pricing has paralyzed the broader PC DIY ecosystem, making budget-conscious custom system building economically unviable.

## Detailed walkthrough ### [00:00](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=0s) Billions in Taxpayer Money and 90% Margins

Steve Burke opens with biting sarcasm, pointing out that because Micron is merely a "small scrappy trillion dollar memory manufacturer," it naturally required billions of dollars in taxpayer funding and tax subsidies over the past several years just to get off the ground. In return, the public has received virtually nothing, while Micron has reaped astronomical financial windfalls. Micron's data center business exploded by 1,042% year-over-year. Even more egregious is what has happened to its consumer segment. Despite gutting its direct-to-consumer Crucial brand in December of the previous year to divert silicon capacity toward enterprise data centers, Micron still maintains residual consumer-facing operations.

A year ago, Micron’s mobile and client business logged a gross margin of 36% and an operating margin of 29%. In its latest quarterly filing, that same mobile and client division posted a staggering gross margin of 90% alongside an operating margin of 88%. Just months earlier, onlookers were already stunned by operating margins passing 80%, but Micron is now roughly doubling its profit on every consumer-grade part sold. Steve laments that this predatory corporate greed has practically choked the PC DIY hobby to death. For creators like Gamers Nexus, it strips away the core satisfaction of reviewing cases, coolers, and accessories—knowing that viewers can no longer afford to assemble systems for fun or use PC building as an accessible creative escape.

- **Data Center Segment Growth**: 1,042% year-over-year increase. - **Consumer/Mobile Gross Margin**: Surged from 36% to an astonishing 90%. - **Consumer/Mobile Operating Margin**: Climbed from 29% to 88%. - **Crucial Brand Status**: Phased out at the end of last year to prioritize AI hyperscalers.

---

[02:10](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=130s) Aligned with NVIDIA and Quarter Financials

Steve notes wryly that while PC builders suffer, there is "good news" for the executives: Micron and Nvidia have completely aligned their product roadmaps. A clip highlights Nvidia CEO Jensen Huang recalling a meeting with Micron CEO Sanjay Mehrotra from three years prior, where Huang supposedly laid out the exact future unfolding today, expressing deep gratitude that Micron and Nvidia locked their trajectories together. In its most recent fiscal quarter, Micron posted $54.2 billion in revenue, representing a 379% year-over-year surge. Its core data center revenue alone brought in $18 billion—up 56% quarter-over-quarter and 1,042% compared to the prior year.

Micron reported $133 billion in revenue for the full fiscal year (up over 250% year-over-year) and achieved an 87% company-wide gross margin in FQ4, with management openly bragging, "In fact, we cannot fulfill the demand of our customers." Steve reminds viewers of the consolidated nature of the memory market: Micron is the sole major DRAM supplier based in the United States, competing only with South Korea's Samsung and SK Hynix. While China's CXMT is rapidly emerging, it remains in regulatory limbo under a "Schrödinger's ban" between conflicting stances from the Pentagon and the Bureau of Industry and Security (BIS). All four of Micron's operating units generated triple-digit growth, with core data center pulling in 90% gross margins and cloud memory reaching 83%. Memory manufacturers are shamelessly riding Nvidia's AI wave, prioritizing High Bandwidth Memory (HBM) over consumer GDDR and DDR because HBM consumes vastly more wafer capacity. Nvidia has already locked up an unprecedented $279 billion in capital commitments through 2032 strictly for memory supply agreements and dedicated fab buildouts.

```mermaid flowchart TD accTitle: Global DRAM Triopoly and Supply Lock-in accDescr: Flow diagram showing how Nvidia's capital commitments monopolize the memory triopoly away from consumer DIY.

subgraph Suppliers ["Global Memory Triopoly"] direction TB M["Micron (USA) 90% Data Center Margin"] S["Samsung (S. Korea)"] H["SK Hynix (S. Korea)"] end

subgraph Capital ["Demand Driver"] NV["NVIDIA $279B committed through 2032"] end

subgraph Allocation ["Production Allocation"] HBM["High Bandwidth Memory (HBM) Vera Rubin / Enterprise AI"] DIY["Consumer GDDR & DDR Starved supply & 4x-5x price hikes"] end

- **Micron Quarterly Revenue**: $54.2 billion (379% YoY growth). - **Core Data Center Revenue**: $18 billion in a single quarter (56% QoQ growth). - **Fiscal Year Total Revenue**: $133 billion (up >250% YoY). - **Nvidia Supply Commitments**: $279 billion allocated through 2032 for memory capacity and manufacturing facilities.

---

[04:24](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=264s) Microslop Merch Interlude

Steve takes a moment to introduce Gamers Nexus's latest store restock: the parody "MICROSLOP" t-shirts on store.gamersnexus.net. Having already sold out twice, the shirts are on their third run due to massive demand, standing as the most popular shirt design the channel has ever released. Steve jokes that people in public regularly compliment the shirt without having any clue what Gamers Nexus is, assuming the wearer is simply an exuberant, unhinged superfan of Microsoft.

Proceeds directly fund the channel's hardware investigations and deep-dive reporting. The shirt features a satirical "MicroSloppy" aesthetic complete with Event Viewer-style error icons, a Blue Screen of Death frowny face, a custom Tux the Linux penguin, and the signature vintage Windows-style color accents. Steve also highlights the in-house designed GN Wireframe V2 mouse mats, illustrated by GN designer Andrew, which feature technical wireframe components over a dystopian, multi-level cityscape interlinked by cable highways, finished with a custom blue rubber backing and stitched border.

---

[05:39](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=339s) HBM Demand and the $6 Trillion Valuation

Returning to the memory supply crisis, Morgan Stanley analyst projections reported by *The Information* reveal that Nvidia alone consumes roughly 37% of the entire global HBM supply. Micron is fully riding this demand surge by supplying advanced HBM stacks for Nvidia's next-generation Vera Rubin architecture platform. Because of this runaway adoption, Micron's HBM revenue has expanded at a rate outpacing even the rest of its explosive business divisions, empowering the company to proactively hike contract prices for the upcoming calendar year.

In tandem with Micron’s windfall, Nvidia’s stock reached historic all-time highs, bringing the chipmaker to the precipice of becoming the world's first $6 trillion company by market capitalization. Steve mocks the broader investor sentiment, highlighting how ecstatic Nvidia shareholders took to social media to celebrate in the only way they seem capable: by generating uncanny, celebratory AI-rendered video clips.

---

[06:42](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=402s) Trillionaire Laughs at RAM Prices

Reacting to one of the circulating AI videos, "off-again, on-again trillionaire" Elon Musk posted on social media: "This is why RAM is so expensive," capped with laughing emojis. Steve cuts down the hubris, noting that while billionaires find the joke hilarious because astronomical memory prices merely act as an enterprise paywall reserving supply for their private data center clusters, everyday consumers and hardware enthusiasts are left stranded a year into a severe, artificial component drought.

The crisis has upended hardware coverage at Gamers Nexus. Even standard PC case reviews are met with resigned sarcasm from commenters stating they can only afford to buy the case to use as an empty decorative display piece because system RAM is completely unaffordable. What was once an accessible hobby has dissolved into collective mockery and despair, as the sheer unobtainability of memory renders the broader PC DIY ecosystem functionally paralyzed.

---

[08:13](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=493s) No End in Sight: Fabricated Shortage Through 2028+

PC Part Picker historical pricing data highlights that consumer memory prices began spiking uncontrollably around October 2025. Standard desktop RAM kits quickly inflated by 400% to 500% before plateauing at these exorbitant new baselines. The ripple effects have hit every branch of modern technology, driving price increases across smartphones, complete prebuilt PCs, gaming consoles, and automotive systems under the universal excuse of an AI-induced memory squeeze.

Micron executives paint an ominous portrait on their earnings calls, claiming both that there is "no end in sight" to the crisis and that Strategic Long-Term Agreements (SLTAs) have provided clear forward visibility. The triopoly suppliers now project that any meaningful supply relief will not arrive until between 2028 and beyond 2030. Meanwhile, these long-term institutional agreements have set a permanently elevated price floor. Micron's leadership confirmed that industry tightness in calendar years 2027 and 2028 will exceed even 2026 levels, boasting that over 75% of Micron's projected 2027 production capacity is already locked down by corporate hyperscalers, with current enterprise negotiations already filling up 2028. Executive leadership describes this suffocating dynamic as an "overall healthy demand-supply environment," celebrating pricing conditions that Steve warns will ensure 90% profit margins remain permanent.

- **Desktop RAM Pricing**: Jumped by 4x to 5x beginning October 2025. - **Projected Recovery Horizon**: Pushed out past 2028, with many contracts extending beyond 2030. - **2027 Fab Capacity**: Over 75% already booked and committed to enterprise clients. - **Contract Negotiations**: Active enterprise talks are already booking out capacity for 2028.

[11:08](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=668s) Financial Earnings Deep-Dive: Micron Dwarfs Chip Giants

If retail consumers refuse to buy memory, memory manufacturers are completely unbothered—they will simply sell millions of sticks, or massive stacks of HBM, directly to Mark Zuckerberg, Elon Musk, or Jensen Huang to capture even more revenue. Gamers Nexus observes that documenting this era feels like leaving historical breadcrumbs for future historians trying to pinpoint where everything went wrong. For Micron, however, business could not be better.

In its earnings report for the fourth quarter of fiscal year 2026 (which does not align with the calendar year), Micron reported $54.23 billion in quarterly revenue, bringing its fiscal year total to $133.19 billion. To put those numbers in perspective:

Micron's quarterly revenue nearly matched all three major semiconductor heavyweights combined. Looking forward, Micron expects sequential growth every quarter, projecting roughly $61.5 billion (give or take a billion dollars as a "rounding error") in the next quarter with an overall company gross margin near 86%.

```mermaid flowchart TD accTitle: Micron Data Center Revenue Growth accDescr: Flowchart illustrating the rapid expansion of Micron's data center divisions between FY2024 and FY2026.

subgraph Past["Fiscal Year 2024"] FY24Combined["Combined Data Center Revenue $8.7 Billion"] end

subgraph Present["Fiscal Year 2026"] CoreDC["Core Data Center Business $37+ Billion (Up from $7.2B in FY25)"] CloudMem["Cloud Memory Business $43 Billion (Up from $13.5B in FY25)"] CombinedFY26["Total DC Revenue: >$80 Billion (Over 9x Growth in 2 Years)"] end

FY24Combined -->|"Over 9x Revenue Explosion"| CombinedFY26 CoreDC --- CombinedFY26 CloudMem --- CombinedFY26 ```

The primary engine of this staggering cash generation is the enterprise data center segment, split internally into two distinct units: - **Core Data Center Business:** Supplies memory for mid-tier cloud, enterprise, and OEM data centers, alongside enterprise storage solutions. This unit brought in $18 billion in Q4 alone (a 142% year-over-year increase) and concluded the fiscal year above $37 billion, up from $7.2 billion the previous year. - **Cloud Memory Business:** Supplies memory to hyperscale cloud providers and provides High Bandwidth Memory (HBM) to all data center clients. This group pulled in $16.28 billion in Q4 (surging 258% year-over-year) and amassed $43 billion across fiscal year 2026, leaping from $13.5 billion in fiscal year 2025.

Combined, Micron's data center operations generated more than $80 billion in revenue in fiscal year 2026. Just two years prior, in fiscal year 2024, both divisions combined brought in a modest $8.7 billion—meaning Micron’s data center revenue exploded more than ninefold in 24 months. The takeaway is blunt: "however much you hate these companies for their AI greed, you don't hate them enough."

[14:54](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=894s) Consumer Business Margins: The 90% Profit Extortion

While enterprise data center numbers are massive, Micron's consumer-facing business presents an even more shocking story. Micron's Mobile and Client division generated $13 billion in quarterly revenue and $36.6 billion across the full fiscal year, growing 29% year-over-year. This growth occurred even after Micron killed off its iconic 30-year-old direct-to-consumer brand, Crucial, in December of the prior year.

In its earnings disclosures, Micron openly acknowledged that overall unit shipments for desktop PCs, laptops, and smartphones will experience potential double-digit declines. Yet, overall dollar revenue continues to climb because the company is extracting drastically higher margins per user. As Micron stated in its presentation:

> "PC and mobile industry revenue remain on track to grow this calendar year driven by strength at the premium end of the market despite potential double-digit overall unit declines in both markets."

Micron highlighted its strategic shift toward premium device segments optimized for "edge AI capabilities." This selective targeting delivered a staggering 90% gross margin and an 88% operating margin for the Mobile and Client segment during the quarter. Just one year prior, this division operated at a 36% gross margin and a 29% operating margin.

For perspective, NVIDIA—the dominant force shaping the AI market—posted a 75% gross margin on $96.2 billion in revenue during its previous earnings report. Micron is pulling higher profit margins selling system memory than NVIDIA makes selling cutting-edge AI accelerators, an absurd dynamic given that NVIDIA actually buys high-margin memory from Micron to assemble parts that often end up idling in hyperscaler warehouses.

[17:49](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1069s) Strategic Customer Agreements and Long-Term Market Lock-In

To insulate themselves from the traditional boom-and-bust volatility that has historically plagued the memory market, Micron, SK Hynix, and Samsung are locking customers into long-term supply pacts. In Micron's terminology, these are Strategic Customer Agreements (SCAs)—equivalent to Long-Term Agreements (LTAs).

During the third quarter of fiscal 2026, Micron had announced 16 SCAs spanning 2026 through 2030, covering four very large clients, three medium clients, and 11 smaller contracts primarily in automotive (including Ford and General Motors). By the fourth quarter, Micron expanded this structure: - **Total Signed SCAs:** Grew from 16 to 26 agreements. - **Revenue Coverage:** Account for over 35% of Micron’s projected revenue pipeline through 2030. - **Pricing Frameworks:** Three-quarters of the contracted revenue operates under defined pricing frameworks featuring price floors and price ceilings, with remaining volumes periodically renegotiated based on prevailing market conditions. - **Extended Timeframes:** Multi-year deals have begun pushing beyond 2030 into 2031, with Micron already executing one-year extensions to 2031 on two existing deals.

On the earnings call, Micron CEO Sanjay Mehrotra championed these agreements:

> "The benefit of SCA is to give us visibility into the demand out there in the future. It really helps us plan our investments, and that really is a fundamental change to the nature of this industry. When you think about it, that it helps us manage our investments, manage our supply expectations with a long lead time, a long time horizon. That is really good for the health of the industry versus the past when you would experience more volatility."

Gamers Nexus rejects the framing that this represents the "health of the industry," arguing instead that it reflects an insular "boys club" padding corporate balance sheets while completely disconnecting from economic reality. Extracting 90% gross margins from consumers is fundamentally unsustainable; when everyday buyers inevitably run out of disposable income, the broader tech sector will inevitably pivot toward predatory extraction models like recurring subscriptions, cloud rentals, and hardware leasing designed to eradicate personal ownership.

[21:27](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1287s) Supply Booked Out to 2028 and the HBM Yield Trap

Micron's forward visibility reveals that consumer memory relief is nowhere in sight. During the call, CEO Sanjay Mehrotra confirmed that more than 75% of Micron’s total wafer and production output is already fully committed for calendar year 2027, with the overwhelming majority of current sales discussions with customers focusing on locking up allocation for 2028.

Unless a major customer defaults on an SCA, that manufacturing capacity is permanently locked away from the consumer market. A massive share of that production is routed into High Bandwidth Memory (HBM) production. HBM acts as a compounding supply penalty for the PC ecosystem: - Fabricating complex multi-layer HBM stacks incurs far lower silicon yields than standard DDR5 memory. - When an individual HBM assembly fails inspection, the loss scraps multiple DRAM dies that could have otherwise yielded functioning desktop or laptop memory modules.

[22:18](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1338s) HBM Manufacturing Realities vs. Consumer Supply

Producing High Bandwidth Memory (HBM) consumes immense silicon resources compared to standard consumer DRAM, driving widespread shortages across the memory market. AI hardware vendors like NVIDIA heavily demand HBM for enterprise accelerators, but HBM stacks multiple individual silicon dies atop one another. Consequently, every manufacturing defect or packaging failure ruins what could have otherwise yielded several standalone consumer chips. HBM yields are noticeably lower, packaging constraints are harsher, and fabricating equivalent memory density in HBM requires up to 3x the wafer area compared to standard DDR5. Even when evaluated against GDDR6 or GDDR7, HBM still eats roughly 2.3x to 3x the total die area once real-world yield losses are factored in.

Beyond raw silicon consumption, HBM demands complex supplementary components that complicate the entire supply chain. Each HBM stack requires a dedicated base logic die and an underlying silicon interposer—an element almost entirely handled by TSMC. While interposers do not directly siphon DRAM wafers, advanced packaging bottlenecks create additional yield loss stages that never exist for simpler consumer memory chips. Every wafer shifted into the complex HBM pipeline directly reduces the remaining fab capacity available for consumer DDR5 and graphics memory.

```mermaid flowchart TD accTitle: HBM Silicon Footprint and Supply Impact accDescr: Flowchart illustrating how HBM packaging complexity and yield loss siphon capacity away from consumer memory.

subgraph Silicon["Silicon Wafer Allocation"] W["Raw Fab Wafers"] W -->|"2.3x to 3x Die Area"| HBM["HBM Stacks"] W -->|"Standard Yields"| Cons["Consumer DDR5 & GDDR"] end

subgraph Packaging["Advanced Packaging Steps"] HBM --> LD["Base Logic Die"] HBM --> IP["TSMC Interposer"] LD & IP --> Loss["Elevated Packaging & Stacking Loss"] end

Loss --> Pinch["Severely Constrained Consumer DRAM Supply"] Cons -.-> Pinch ```

[23:41](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1421s) Industry-Wide Shortages Booked Through 2028 and Beyond

In prepared remarks and on their earnings call, Micron executives explicitly guided that the severe memory crunch is set to worsen. The company confirmed that despite fiscal 2026 being exceptionally strong, fiscal 2027 and fiscal 2028 are expected to be tighter still, as demand continues outstripping supply with zero equilibrium in sight. CEO Sanjay Mehrotra openly described this worsening shortage as a "healthy" dynamic for memory suppliers, noting that prolonged imbalances bode remarkably well for firm pricing power across the industry.

Micron is not an isolated case; its direct competitors echo the same multi-year forecast. Months earlier, Samsung warned that the DRAM shortage would extend into 2028, while SK Hynix projected that memory demand will outpace production through 2030. Micron’s move in December 2025 to kill off its consumer-facing Crucial brand now clearly stands as the opening move of a years-long drought for end consumers. Roughly one year after retail memory pricing began its dramatic spike driven by the AI hyperscaler buildout, suppliers have completely pivoted toward their most lucrative enterprise buyers.

- Micron guides that supply/demand balances will be far tighter in fiscal 2027 and 2028 than in fiscal 2026. - Sanjay Mehrotra confirmed the company has no "line of sight" to when supply and demand will rebalance, celebrating the outlook as "healthy" for industry margins. - Samsung previously signaled shortages stretching through 2028, and SK Hynix forecasted undersupply through 2030. - Micron shuttered Crucial in December 2025, ditching consumer retail right before the AI server crunch escalated.

[25:58](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1558s) The Hypocrisy of "Superintelligence" and Political Influence

During Micron's promotional messaging around enterprise hardware, CEO Sanjay Mehrotra proclaimed that memory is foundational to scaling up artificial intelligence toward "super intelligence" (or "SI"). Steve pauses the clip in mock disbelief, pointing out the absurdity of executives trading AI buzzwords for even grander sci-fi terminology while retail consumers foot the bill. The tech industry's rhetoric has grown so disconnected from reality that watching these corporate victory laps feels completely ridiculous.

Gamers Nexus reflects on over a year spent cataloging the relentless pricing squeeze, expressing deep frustration at the broader political capture enabling it. While upcoming U.S. elections in November serve as a potential moment for public pressure, tech giants across the board—including NVIDIA, AMD, and Micron—have poured unprecedented sums into government lobbying and political campaigns over recent cycles. AMD, for instance, contributed meaningful political funding for the first time in decades. In the absence of legislative remedies targeting anti-consumer hardware pricing or memory cartels, consumers remain defenseless against unchecked corporate leverage.

[28:40](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1720s) Conclusion: The Impossibility of PC Building Under 90% Margins

The reality of these sky-high margins has completely transformed hardware reviewing and the broader DIY market. It used to be straightforward to publish four or five PC hardware reviews a week celebrating neat new products, but that model falls apart when ordinary builders are priced out of the ecosystem entirely. A PC chassis manufacturer can engineer a great case and keep prices affordable because sheet metal is cheap, but a builder saving $30 on steel means nothing when system RAM is marked up to a 90% profit margin. The video wraps up urging viewers to check out the Gamers Nexus store and to reach out if they are aware of meaningful policy initiatives that could hold memory cartels accountable.

## Notable quotes > [00:00](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=0s) small scrappy trillion dollar memory manufacturer — Steve Burke

> [02:10](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=130s) In fact, we cannot fulfill the demand of our customers. — Micron Management

> [06:42](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=402s) This is why RAM is so expensive, — Elon Musk

> [08:13](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=493s) no end in sight — Micron Executives

> [08:13](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=493s) overall healthy demand-supply environment — Micron Executive Leadership

> [11:08](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=668s) however much you hate these companies for their AI greed, you don't hate them enough. — Steve Burke

> [14:54](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=894s) PC and mobile industry revenue remain on track to grow this calendar year driven by strength at the premium end of the market despite potential double-digit overall unit declines in both markets. — Micron

> [17:49](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1069s) The benefit of SCA is to give us visibility into the demand out there in the future. It really helps us plan our investments, and that really is a fundamental change to the nature of this industry. When you think about it, that it helps us manage our investments, manage our supply expectations with a long lead time, a long time horizon. That is really good for the health of the industry versus the past when you would experience more volatility. — Sanjay Mehrotra

> [23:41](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1421s) line of sight — Sanjay Mehrotra

> [25:58](https://www.youtube.com/watch?v=sXLpZdkS7u8&t=1558s) super intelligence — Sanjay Mehrotra

## Mentioned Steve Burke, Tim Phetdara, Ben Benson, Andrew, Jensen Huang, Sanjay Mehrotra, Elon Musk, Mark Zuckerberg, Gamers Nexus, Micron, Crucial, NVIDIA, Samsung, SK Hynix, CXMT, AMD, Intel, Broadcom, Ford, General Motors, TSMC, Microsoft, Morgan Stanley, The Information, Pentagon, Bureau of Industry and Security (BIS), PC Part Picker, High Bandwidth Memory (HBM), DDR5, GDDR6, GDDR7, Vera Rubin, Strategic Customer Agreements (SCA), MICROSLOP T-shirt, GN Wireframe V2 mouse mats

## Video description Grab a MICROSLOP T-SHIRT! https://store.gamersnexus.net/products/microslop-parody-t-shirt Micron has discovered an infinite money glitch: Just keep increasing the price, or something. It was that simple all along. Micron's consumer margin is now a disgusting 90%, multiplying what they make versus prior quarters. That's in spite of the company killing Crucial in December of last year, which was its direct-to-consumer line of system components. The company still has consumer parts, but seeing them continue to skyrocket in margin and price after cutting Crucial tells us just how much money these companies are making. In its latest earnings report, Micron noted that it expects the "shortage" to continue into 2027 and 2028 at least, with several of its customers -- like the big AI hyperscalers -- wanting contract extensions beyond 2030.

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TIMESTAMPS

00:00 - Billions in Taxpayer Money 02:10 - Aligned with NVIDIA 04:24 - MICROSLOP 05:39 - HBM Demand 06:42 - Trillionaire Laughs at RAM Prices 08:13 - No End in Sight 11:44 - Financial Earnings Deep-Dive 14:54 - Consumer Business Margin and Growth 17:49 - More Long-Term Agreements 21:27 - 2027 and 2028 Booked 25:23 - Conclusion

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Steve Burke: Host, Writing Tim Phetdara: Editing Ben Benson: Writing

[Source](https://www.youtube.com/watch?v=sXLpZdkS7u8)

中文简报

美光客户端利润率达90% AI协议锁定供应至2028年美光将晶圆产能重新分配给高带宽AI内存，令零售PC装机市场陷入供应匮乏，并将创纪录的90%消费端利润率锁定至2028年。 Gamers Nexus详细梳理了美光2026财年的财务业绩，重点指出这家内存供应商在出货量出现两位数下滑的情况下，其消费客户端业务的毛利率仍达到了前所未有的90%。在企业对AI硬件的庞大需求以及来自Nvidia数十亿美元承诺的推动下，内存制造商正牺牲标准消费级DRAM，将硅晶圆产能转移至复杂的超高带宽内存（HBM）。美光、Samsung和SK Hynix已通过长期客户协议锁定产能，确保了人为抬高的高价格基准以及持续到2028年和2030年的严重供应紧缺。Steve Burke认为，这种不受约束的企业榨取实际上已经瘫痪了PC DIY装机爱好，将普通装机者挤出市场，而科技公司则借助广泛的政治游说来逃避监管审查。美光公布第四财季创纪录的542亿美元营收，全财年营收达1330亿美元，这主要受数据中心营收同比暴增1042%所推动。 (2:10) 尽管关闭了直接面向消费者的Crucial品牌，在出货量下滑的背景下，美光的移动与客户端部门通过发力高端边缘AI设备，毛利率仍达到90%，营业利润率达88%。 (14:54) 美光2027年超过75%的产能已被企业级超大规模数据中心客户锁定，管理层预计行业短缺将在2028年前进一步加剧，部分合同甚至已延长至2030年以后。 (8:13) 高带宽内存（HBM）生产所需的晶圆面积最高可达标准DDR5的三倍，复杂的封装缺陷和报废的多芯片堆叠进一步加剧了消费级DRAM的短缺。 (22:18)

Reading summary

Gamers Nexus argues that memory manufacturers like Micron are leveraging taxpayer subsidies and surging enterprise AI demand to record unprecedented profits, leaving the consumer PC hardware market starved and functionally unaffordable. Record Revenue and Consumer Margin Extraction (14:54) Micron reported $54.23 billion in quarterly revenue—surpassing the combined quarterly revenues of AMD, Intel, and Broadcom—and brought in $133.19 billion for the full fiscal year. While enterprise data center business grew rapidly, Micron's consumer-facing Mobile and Client division generated $13 billion for the quarter and $36.6 billion for the year. This division saw its gross margin expand from 36% to 90%, with operating margins climbing from 29% to 88% over a single year. Gamers Nexus highlights that this revenue growth occurred despite Micron phasing out its consumer-oriented Crucial brand in December 2025. Company filings explicitly noted that total unit shipments for desktop PCs, laptops, and smartphones face projected double-digit declines. Instead of relying on volume, Micron grew revenues by shifting toward premium segments and drastically increasing profit extraction per unit sold. Enterprise AI Alignment and HBM Manufacturing Costs (22:18) The memory crunch is primarily driven by supplier coordination with hyperscale AI hardware clients, particularly NVIDIA. To meet enterprise requirements for accelerators like the Vera Rubin platform, memory makers have directed manufacturing capacity toward High Bandwidth Memory (HBM). Morgan Stanley analyst projections reported by The Information indicate that NVIDIA alone consumes approximately 37% of the global HBM supply, while NVIDIA has committed $279 billion through 2032 to secure dedicated fab capacity and memory supply. Fabricating HBM imposes severe yield penalties on general memory production. HBM stacks require up to three times the silicon wafer area of standard DDR5, or roughly 2.3 to 3 times the die area of graphics memory once yield loss is accounted for. Furthermore, assembling multi-layer dies with base logic and TSMC interposers introduces complex failure points. When an HBM assembly fails inspection, multiple DRAM dies are scrapped that could have otherwise been packaged into standard desktop and laptop memory modules. Long-Term Supply Lock-In Extending Past 2028 (17:49) To mitigate traditional semiconductor market volatility, memory suppliers are cementing multi-year Strategic Customer Agreements (SCAs). Micron expanded its contracted pipeline to 26 SCAs covering more than 35% of its projected revenue through 2030, with certain deals extending to 2031. Three-quarters of this contracted revenue operates under defined price floors and caps, insulating suppliers from future price drops. Consequently, relief for consumer retail pricing is not projected to arrive in the near term. CEO Sanjay Mehrotra confirmed that over 75% of Micron’s 2027 production capacity is already locked down, with ongoing negotiations booking into 2028. Competitors Samsung and SK Hynix have similarly projected supply constraints extending through 2028 and 2030, respectively. Micron executives described this protracted supply deficit as a 'healthy' dynamic, whereas Gamers Nexus characterizes it as an artificial bottleneck that cements inflated price floors for desktop RAM. Severe Fallout Across the DIY Hardware Ecosystem (8:13) Historical pricing data from PC Part Picker shows desktop RAM prices surged by 400% to 500% starting in October 2025, elevating base costs across smartphones, consoles, automotive systems, and prebuilt computers. Steve Burke points out the irony that Micron achieved these historic returns after receiving billions of dollars in public funding and tax subsidies designed to bolster domestic chip production. This pricing landscape has paralyzed the broader PC building hobby. Savings on ancillary hardware, such as computer cases and cooling components, are effectively canceled out by the hyper-inflated cost of system memory. Gamers Nexus notes that hardware manufacturers and tech giants have amplified government lobbying, leaving everyday consumers with little regulatory recourse as memory triopolies prioritize enterprise AI contracts. Gamers Nexus concludes that the consolidation of wafer capacity into high-margin enterprise AI contracts has fractured the consumer PC enthusiast market. With multi-year corporate agreements securing memory supply through 2028 and beyond, the outlet raises unresolved concerns that persistent high component prices will permanently restrict personal hardware ownership and push the broader technology sector toward subscription and hardware-leasing models.

Source quotes

[0:00] Steve Burke: small scrappy trillion dollar memory manufacturer [2:10] Micron Management: In fact, we cannot fulfill the demand of our customers. [6:42] Elon Musk: This is why RAM is so expensive, [8:13] Micron Executives: no end in sight [8:13] Micron Executive Leadership: overall healthy demand-supply environment [11:08] Steve Burke: however much you hate these companies for their AI greed, you don't hate them enough. [14:54] Micron: PC and mobile industry revenue remain on track to grow this calendar year driven by strength at the premium end of the market despite potential double-digit overall unit declines in both markets. [17:49] Sanjay Mehrotra: The benefit of SCA is to give us visibility into the demand out there in the future. It really helps us plan our investments, and that really is a fundamental change to the nature of this industry. When you think about it, that it helps us manage our investments, manage our supply expectations with a long lead time, a long time horizon. That is really good for the health of the industry versus the past when you would experience more volatility. [23:41] Sanjay Mehrotra: line of sight [25:58] Sanjay Mehrotra: super intelligence

Original transcript

[0:00] Because Micron is a small scrappy [0:02] trillion dollar memory manufacturer, it [0:03] needs some government help to get off [0:05] the ground to the tune of billions of [0:07] dollars in taxpayer money and tax breaks [0:10] over the last several years. And for [0:12] that we get, [0:16] turns out we don't really get much of [0:19] anything, but Micron gets something. [0:21] Their data center business has grown [0:23] 1,042% in the last year. And actually, [0:25] as we just learned in its newest [0:27] quarterly filing, even its consumer [0:29] margin has grown to disgusting levels. [0:32] Micron killed its consumer lineup of [0:34] crucial products last year to cater more [0:36] towards data centers, but it still [0:37] technically has some consumer products. [0:39] A year ago, Micron's mobile and client [0:41] business had a gross margin of 36% and [0:44] an operating margin of 29%. In the last [0:47] quarter, Micron's mobile and client [0:49] business had a gross margin of 90% and [0:53] an operating margin of 88%. It was just [0:56] a few months ago when we were already [0:59] flabbergasted at the over 80% operating [1:03] margin in the segment. They are nearly [1:06] doubling what they make every time they [1:09] sell a consumer grade product. There's [1:12] this is why nobody can afford computers. [1:15] And it's this level of greed that has [1:18] destroyed the hobby and taken away my [1:21] ability to review computer cases and [1:23] coolers and computer accessories and [1:26] have uh the actual reward of knowing [1:29] that people can use that review to buy [1:32] stuff that they enjoy to have fun with [1:34] to build a computer for fun. [1:38] That's what Micron's taken away from all [1:41] of us is PCDIY as an escape and a hobby. [1:45] But there's good news. Micron and Nvidia [1:47] have aligned their road maps. [1:50] >> We spent a lot of time with the supply [1:52] chain. I mean, if you ask Sanjay Metra [1:54] over at over at Micron, he'll tell you [1:58] three years ago during a meeting, I [2:00] explained the future to him exactly as [2:02] it's happening right now. And I was [2:04] really grateful that that Micron and [2:06] Nvidia really lined up to line up all of [2:09] our roadmap. [2:10] >> Micron made 54.2 billion in revenue [2:13] during its last fiscal quarter, a [2:15] year-over-year increase of 379%. [2:18] Micron's core data center business [2:20] generated $18 billion in revenue during [2:22] the quarter, an increase of 56% [2:25] quarter-over-arter. That means Micron's [2:27] data center business grew by,042% [2:29] year-over-year compared to the same [2:30] quarter last year. Business is good when [2:33] supply is tight. [2:34] >> We delivered an exceptional quarter, [2:36] exceptional year with 133 billion in uh [2:40] revenue, more than 250% up [2:43] year-over-year with 87% gross margins in [2:46] FQ4. In fact, we cannot fulfill the [2:50] demand of our customers. I [2:51] >> think everyone on this channel knows by [2:52] now, but if you don't, Micron is one of [2:55] three major memory suppliers in the [2:56] world. They are the only one based in [2:58] the United States. Samsung and SKH [3:00] Highix are the other two in South Korea. [3:02] CXMT is a rapidly rising star in the [3:05] space but is from China and therefore [3:08] banned in the United States or well [3:11] technically it it's got the Schroingers [3:13] ban going on. It's we've been over it's [3:14] banned and not banned depending on [3:15] whether you ask the Pentagon or the BIS. [3:17] But anyway, they're a memory company [3:19] Micron and all four of Micron's business [3:22] units grew by triple digits [3:24] year-over-year with outlandish margins. [3:26] Micron's core data center had a gross [3:28] margin of 90%. Micron's cloud memory [3:31] business had a gross margin of 83%. [3:34] Micron, Samsung and SKH Highix are [3:36] riding Nvidia's coattails in the AI [3:38] boom. And Nvidia needs a lot of high [3:40] bandwidth memory or HBM to make its AI [3:42] and data center products. And HBM in [3:45] particular is more demanding on the [3:47] memory supply than consumer grade GDDR. [3:50] >> We are going to use a lot of high-speed [3:52] memory. [3:52] >> No HPM for you. I need HPM. Nvidia has [3:55] committed $279 billion for supply and [3:59] capacity arrangements that are primarily [4:01] for quote memory and manufacturing [4:04] facilities end quote through 2032. So [4:08] the answer to if you want consumer [4:10] memory is get you and all of your [4:12] closest friends to pull $279 [4:16] billion and you too can have some [4:19] memory. Maybe we can start an Indiegogo [4:21] page or a GoFundMe. This video is [4:24] brought to you by us and our Microsoft [4:26] t-shirts on store.gamersexus.net. [4:28] We just restocked these after having [4:31] sold through all of our inventory again. [4:33] Now the third time because so many [4:35] people are such big fans of Microsop. [4:38] This is our most popular design we've [4:39] ever launched. Even just wearing it [4:41] around, I get compliments from people [4:42] who have absolutely no idea what a GN is [4:46] because I assume they like Microsop so [4:49] much. They must just be mega fans of [4:51] Microsoft who love being reminded of its [4:53] existence. These directly support our [4:56] deep dives and research. You can grab [4:57] them on the store. They feature a Micro [4:59] Sloppy logo with event viewer icons, [5:02] including a blue screen of death, frowny [5:04] face, a tux, the penguin we've made, and [5:07] the classic red accent yellow bane. You [5:09] can grab these alongside things like our [5:11] GN Wireframe V2 mouse mats on the store. [5:13] Perfect for both your mouse and keyboard [5:15] for a clean desk space and fully [5:17] designed in-house by Andrew for the art [5:20] with wireframe components and a [5:22] dystopian multilevel citystyle layout [5:25] connected by highways of cables and [5:27] tubes which the internet is still a [5:29] series of. We use a custom blue rubber [5:31] underside matched to the blue stitched [5:33] border and you can grab these and more [5:35] like the Microsoft shirts on [5:37] store.gamersex.net. [5:39] Back to it. Nvidia's HBM demands account [5:41] for about 37% of the global supply [5:44] according to Morgan Stanley analyst [5:46] projections as reported by the [5:48] inference. Micron is realizing the gains [5:50] of Nvidia's insatable demand. Micron [5:53] provides Nvidia with HBM for the Ver [5:55] Rubin platform. As a result, Micron's [5:57] HBM revenue grew faster than the rest of [5:59] the company's total revenue. Micron even [6:02] increased prices for next year. And [6:04] Micron's close partner, Nvidia's stock, [6:06] recently hit an all-time high of its own [6:09] with several outlets reporting that [6:10] Nvidia is close to becoming the world's [6:12] first $6 trillion company by market cap. [6:16] And Nvidia investors celebrated in the [6:18] only way that Nvidia shareholders know [6:20] how to do really much of anything at [6:22] this point. Use AI. [6:42] In a response to the AI video, off again [6:45] on again trillionaire Elon Musk [6:47] remarked, quote, "This is why RAM is so [6:50] expensive." Laughing emoji. Laughing [6:52] emoji. Ha. Get it? That's so funny [6:57] because the memory shortage payw walls [6:59] the memory for Elon Musk's data centers. [7:05] But although these chuckle who are [7:07] insecure enough to have to pay people to [7:10] level up for them in a video game might [7:12] think that it's funny, the rest of us [7:14] are about a year deep in the global [7:16] memory shortage. And even just at G from [7:19] our perspective, our core audience been [7:21] here forever for the reviews and the [7:23] computer hardware builds, testing, all [7:25] that stuff, overclocking, even just for [7:27] us, it's affected PCDIY so much over the [7:30] past year that posting a simple case [7:33] review gets flooded with really two [7:35] types of comments. One of which is, [7:38] "Wow, I can't wait to buy that and look [7:40] at it as a prop because I can't afford [7:42] to put any memory in the computer case." [7:45] And [7:46] That's fair. That's a fair comment. [7:49] That's where this industry is now, where [7:51] it has become a meme. The stuff is so [7:54] unaffordable and unobtainable that the [7:57] only thing left for people is to make [8:00] fun of the fact that their hobby is [8:03] unaffordable and unobtainable because [8:05] what else are you going to do about it [8:07] at this point? And all of that is [8:09] because of one core component, memory. [8:13] PC part picker trend data shows that [8:15] consumer memory prices began to increase [8:18] rapidly around October 2025 with many [8:21] kit prices increasing by four or five [8:22] times since then. We've been covering it [8:24] since the beginning. These price [8:26] increases continued for a few more [8:28] months before leveling off at a much [8:30] higher level. As a result of what AI [8:32] companies claim as a memory shortage, [8:34] companies have increased prices for [8:36] phones, computers, consoles, and cars. [8:38] We've seen an onslaught of price [8:40] increases for consumer electronics [8:42] thanks to sky-high memory prices. As for [8:44] Micron, they're talking about how [8:46] there's no end in sight, but they're [8:48] also talking about how their SCAS or [8:51] strategic long-term agreements have [8:53] given them better visibility. Somehow [8:55] both things are true simultaneously. [8:58] And the end result for us is that the [9:00] three biggest memory companies are [9:02] projecting anywhere from 2028 to 2030 to [9:06] beyond 2030 for some form of recovery [9:09] depending on which one you talk to. But [9:11] the long-term agreements, as we talked [9:12] about in a recent pricing update video, [9:14] have set the floor so that it's [9:17] permanently higher. The manufactured [9:19] shortage for memory isn't going away [9:20] anytime soon. Micron expects memory and [9:23] storage conditions to worsen in its next [9:25] few years. in calendar 27 as well as [9:28] 2028 [9:30] uh we see demand exceeding supply and in [9:33] fact we see greater tightness in the [9:37] industry in 27 and in uh 28 versus uh [9:42] 26. So overall supply demand environment [9:45] is only getting tighter. We do not have [9:49] in this strong demand environment. We do [9:51] not have uh line of sight to when supply [9:54] and demand will uh get in balance. [9:56] >> And Micron has already sold 75% of its [10:00] capacity for 2027, [10:02] ensuring that there's little room for [10:04] buyers who aren't gigantic businesses. [10:07] I'll tell you that 2027 [10:09] uh 7 more than 75% of our um output is [10:15] already committed uh for 2027 and uh [10:19] majority of discussions with our [10:21] customers today are already around 2028. [10:25] >> But there's good news. Micron says that [10:27] this represents a healthy environment. [10:30] So I see uh healthy demand supply [10:32] environment here uh you know going [10:35] forward for the factors related to [10:37] demand as well as uh for supply and that [10:41] obviously bodess well uh for the [10:43] industry pricing environment as well. [10:45] Overall the industry demand supply [10:47] environment and the outlook is in a very [10:51] healthy place here [10:52] >> with the margins growing as they are [10:53] including and especially actually in [10:55] consumer it's hard to imagine them ever [10:58] returning even if the prices come down [11:00] that doesn't mean they'll let the margin [11:02] come down with it and the companies have [11:05] ensured that if you can't afford the [11:08] memory that's fine they'll sell a [11:11] million sticks of it to Mark Zuckerberg [11:13] or Elon Musk or Jensen and Juan instead, [11:15] although for him in the form of HBM, not [11:17] sticks, and they'll get what they need [11:20] that way, which is somehow more money. [11:25] At this point, we're basically leaving [11:26] historical breadcrumbs for future [11:28] historians to wonder where the it [11:31] all went wrong. And for now, it looks [11:35] like it's going to start with Micron. [11:38] I mean, they're they're doing just fine. [11:40] I mean, more for everybody else. On [11:43] September 30th, Micron released [11:45] financial results for the fourth quarter [11:46] of its fiscal year, which doesn't align [11:48] with the calendar year. Micron generated [11:51] 54.23 billion in revenue in the fourth [11:54] quarter and 133.19 billion total for the [11:58] fiscal year. For reference, AMD [12:00] generated 11.5 billion in its last [12:03] quarter. Intel made $16.1 billion and [12:06] Broadcom made $29.6 billion. Combined, [12:10] these three semiconductor companies [12:11] posted around 57 billion in revenue [12:14] during recent filings. Micron alone did [12:17] 54 billion, nearly equating all three [12:20] combined. Micron says its next fiscal [12:22] year will be even better with each [12:24] quarter improving sequentially. Next [12:27] quarter, Micron expects to generate [12:28] about 61.5 billion in revenue, give or [12:32] take a billion dollars or so. you know, [12:34] rounding error and it expects a gross [12:37] margin of around 86%. Although the [12:40] consumer margin is kind of the most [12:41] shocking to us, the one that's expected [12:44] is the data center businesses generating [12:46] most of the money at this point for them [12:48] as the company has further reduced its [12:51] service to consumers. But where it [12:53] maintains it, it's made sure it makes a [12:55] lot of money. Now, Micron splits its [12:57] data center revenue into two business [12:58] groups. Its core data center business is [13:00] focused on memory for quote mid-tier [13:02] cloud enterprise and OEM data center [13:04] customers and storage solutions for all [13:06] data center customers end quote. [13:08] Micron's cloud memory business is its [13:10] other data center cash cow. The cloud [13:12] memory unit includes memory solutions [13:14] sold to hypers scale cloud companies and [13:16] HBM for all data center customers. In [13:19] the last quarter, Micron's core data [13:21] center business generated $18 billion in [13:23] revenue and grew by a staggering 142% [13:26] year-over-year. Its cloud memory [13:28] business generated $16.28 billion in [13:31] revenue and grew by 258% compared to the [13:34] same quarter a year ago. In total, [13:36] Micron's cloud memory business generated [13:38] 43 billion in revenue in fiscal year [13:40] 2026. So for what that means, that's an [13:44] increase of about $30 billion from [13:46] fiscal year 2025 when it generated 13.5 [13:49] billion. Meanwhile, Micron's core data [13:52] center business ended up with more than [13:54] $ 37 billion in revenue for the fiscal [13:56] year, which was up from $7.2 billion in [13:59] the prior year. Combined, Micron's [14:02] cloud, memory, and core data center [14:03] businesses made more than $80 billion in [14:06] revenue during the fiscal year. We'll [14:08] compare these numbers to two years ago. [14:10] In fiscal year 2024, Micron's two data [14:13] center businesses generated about $8.7 [14:17] billion in revenue when combining both [14:19] groups. So, in a span of two years, [14:22] Micron's data center revenue grew by [14:24] more than 9x. The TLDDR is however much [14:27] you hate these companies for their AI [14:29] greed, you don't hate them enough. [14:33] Wait a Sorry. I just need to SI. It's SI [14:39] now, not AI. [14:41] Anyone who says AI is [14:44] the enemy. So, I guess I'm in I'm an [14:47] enemy of the state now. Anyway, Micron [14:50] makes it easy to hate them even more for [14:53] their consumer division. Micron's mobile [14:55] and client business generated 13 billion [14:57] in revenue for the quarter and 36.6 [15:00] billion total for the fiscal year. The [15:02] company's mobile and client business [15:03] grew by 29% [15:06] year-over-year. This is the company that [15:10] killed its brand Crucial. [15:14] Did named the brand Crucial [15:18] decided n so crucial got rid of it after [15:22] 30 years in service. That company Micron [15:27] still saw growth in the segment that [15:30] Crucial was servicing which is consumer. [15:33] That's how much money this [15:35] company makes. In an earnings [15:37] presentation, Micron admitted that [15:39] shipments for PCs and mobile devices [15:41] will actually fall even as revenue [15:44] continues to climb. I'm not a directions [15:47] expert, but falling while money goes up. [15:52] Normally an opposition, unless you can [15:55] make more per person. Micron said this [15:58] quote, "PC and mobile industry revenue [16:00] remain on track to grow this calendar [16:02] year driven by strength at the premium [16:04] end of the market despite potential [16:06] double-digit overall unit declines in [16:09] both markets." End quote. Micron said [16:11] it's focused on the premium segments for [16:14] PCs and mobile devices and quote well [16:16] positioned to support customers as they [16:19] expand edge AI capabilities. End quote. [16:22] Micron is all about margins for premium [16:24] devices. Micron had a 90% gross margin [16:27] for its mobile and client business in [16:29] the quarter with an operating margin of [16:31] 88%. A year ago, Micron had a gross [16:34] margin of 36% and an operating margin of [16:37] 29% in this business. I just I I really [16:40] can't drive home enough how ridiculous [16:43] this is that on the consumer side, 90% [16:48] margin is unfathomable [16:52] amounts of profit on selling something. [16:54] That's like that's insane. And it's [16:56] something as expensive as memory is too. [17:00] It's a higher margin than some of their [17:01] B2B business units. To compare, during [17:04] its last earnings, Nvidia posted 96.2 [17:07] billion in revenue with a gross margin [17:10] of 75%. So, just so we're all clear, [17:13] Nvidia, the cane maker in the AI space, [17:16] the AI bubble maker, the company that's [17:20] driving all of this, has a lower margin [17:23] than Micron, the company it buys memory [17:26] from for its [17:29] AI parts that sit in a warehouse [17:31] somewhere. And if you know something [17:33] about that, you can email us at [17:35] tipsgamersac.net that specifically [17:39] where but [17:41] it's like it it's insane. Micron like [17:44] SKH Highex and Samsung's doing its best [17:46] to lock in the long-term and be somewhat [17:48] bubble resistant. During its third [17:50] quarter earnings of fiscal 2026, Micron [17:52] announced strategic customer agreements [17:53] for SCAs with 16 companies in data [17:56] center, consumer, and automotive [17:57] markets. At the time, Micron said these [17:59] agreements would give Micron's customers [18:01] supply asurances while ensuring Micron [18:04] generates more predictable revenue. As [18:06] we covered in our last RAM pricing [18:07] update, Micron's aim is to reduce or [18:10] lessen the traditional boom and bust [18:11] cycles that have affected the memory [18:13] market for years. At the time, Micron [18:15] said it had SCAs with 16 large companies [18:18] that would typically have a 5-year [18:19] period from 2026 to 2030. Automotive [18:22] partners would have a three-year [18:24] agreement. Micron didn't name any [18:26] customers, but it said the SCAs include [18:28] quote four very large customers and [18:30] three medium-sized customers end quote. [18:32] the remaining 11 customers being smaller [18:34] and in the automotive industry. Micron [18:36] subsequently announced SCA deals with [18:38] Ford and General Motors in the [18:40] automotive space. Back to the present, [18:42] one quarter later, Micron has signed [18:44] even more SCA deals and extended the [18:47] timeline. Micron now has 26 signed SCAS [18:50] which it estimated to be worth more than [18:52] 35% of its revenue through 2030. Of [18:54] this, 3/4 of the estimated revenue has a [18:57] quote defined pricing framework and [18:59] quote with price floors and ceilings. [19:01] Micron will negotiate the remaining sea [19:03] revenue based on market prices [19:05] periodically. Micron's agreements with [19:07] customers now go beyond 2030. Per [19:09] Micron, quote, "Customers want SEA [19:12] assured supply beyond 2030, and we have [19:14] now signed seas that extend into 2031 as [19:17] well as one-year extensions to 2031 for [19:20] two agreements. Any new discussions on [19:22] SCAS where pricing is involved are [19:23] negotiated with higher pricing based on [19:25] prevailing market conditions and [19:26] outlook." End quote. SCA is Micron's [19:29] language for long-term agreements or [19:31] LTAs. That's what Samsung and SK Heinix [19:33] called them. It's all the same thing [19:34] though. On the earnings call, Micron CEO [19:37] Sanjay Merro said this SCAS give Micron [19:40] more visibility than it would have had [19:43] otherwise. [19:44] >> The benefit of SCA is to give us [19:47] visibility into the demand out there in [19:50] the future. It really helps us plan um [19:53] our investments and that really is a [19:55] fundamental change to the nature of this [19:57] industry. Uh when you think about it [19:59] that it helps us um uh manage our [20:02] investments, manage our supply [20:04] expectations with a a long uh lead time, [20:08] a long time horizon. Um that is really [20:11] good for the health of the industry [20:13] versus the past uh when you would [20:15] experience more volatility. Now, by [20:17] health of the industry, he means the [20:20] boys club that they're all in. Bicron's [20:22] margin and the companies they work with [20:24] like Nvidia. Nothing about this is [20:27] healthy. This is not healthy. It is not [20:31] sustainable. I'm not an economist, but I [20:35] have to buy stuff just like everyone [20:36] else. And I mean, I don't need to tell [20:39] our audience it's not sustainable for [20:42] margin to be 90%. that might work for [20:45] them now and it's working great but at [20:48] some point everyone else runs out of [20:49] money and it seems to us still I still [20:53] maintain that the B2B orientation here [20:57] is designed so that if this starts to [21:00] sort of fall apart people run out of [21:03] money consumers pull back well that's [21:05] okay they can find new ways to extract [21:08] smaller amounts of money from you which [21:10] normally would be a good thing because [21:12] it means smaller prices. In this case, I [21:15] still think the smaller amounts of money [21:18] come at more frequent intervals, i.e. [21:21] subscriptions or rentals or cloud [21:24] services or things that otherwise move [21:26] away from ownership. Now, as part of [21:28] Micron's new visibility, Micron knows [21:30] that 75% of its total output is already [21:34] taken for next year. I'll tell you that [21:36] 2027 [21:38] uh 70 more than 75% of our um output is [21:43] already committed uh for 2027 and uh [21:48] majority of discussions with our [21:50] customers today are already around 2028. [21:54] So [21:54] >> Micron's capacity is already booked. So [21:56] barring a customer defaulting, it's not [21:58] coming back. And a lot of this is going [22:00] to HBM where HBM sort of it causes a [22:04] compounding issue for consumers as we've [22:06] talked about where it reduces the supply [22:08] while it's reducing the supply. The [22:10] yields are lower for HBM. you lose one [22:13] HBM part and that could be multiple DRAM [22:16] dieseS that would have gone into [22:18] multiple individual chips that could go [22:20] into consumer products and so the loss [22:23] is greater the yields are lower the [22:25] constraints are higher and the demand [22:26] for HPM has been straining the global [22:29] memory supply but that's what these [22:32] companies that do AI parts like Nvidia [22:34] want for their server solutions HPM [22:38] requires up to three times the wafer [22:40] area to produce the same amount amount [22:42] of memory capacity as DDR5 just as an [22:44] example. Now, not the best comparison, [22:47] but even if you look at GDR 7 or 6 for [22:50] example, the consumption of die area for [22:55] HBM is still somewhere in the range of [22:57] 2.3x to maybe 3x the amount of area used [23:02] when you factor in all conditions such [23:04] as the yield losses. There are other [23:06] factors that are compounding like for [23:09] example the need for a logic die for HPN [23:12] the need of an interposer though that's [23:15] done typically by TSMC or maybe entirely [23:18] these days by TSMC uh but those [23:21] contribute too and the result is the end [23:24] of the day reduce consumer supply and [23:26] where something like an interposer might [23:28] not affect the memory supply directly [23:30] all these things factor in and then when [23:33] you go to packaging you have more loss [23:35] processes than you would for a simpler [23:37] chip for a consumer part. That also [23:39] factors in. Anyway, in prepared remarks [23:41] before its earnings call, Micron said [23:44] this quote, "As strong as fiscal 2026 [23:47] was, we expect fiscal 2027 to be even [23:49] better. Industry demand has strengthened [23:51] since our last earnings call, and we [23:53] expect memory and storage supply demand [23:56] conditions to be much tighter in fiscal [23:58] 2027 and 2028 than they were in 2026." [24:01] End quote. Micron CEO Sanjay reiterated [24:03] the warnings about the prolonged memory [24:05] shortage during the call [24:06] >> in calendar 27 as well as 2028. [24:10] Uh we see demand exceeding supply and in [24:14] fact we see greater tightness in the [24:17] industry in 27 and in uh 28 versus uh [24:22] 26. So overall supply demand environment [24:26] is only getting tighter. we do not have [24:29] in this strong demand environment. We do [24:31] not have uh line of sight to when supply [24:34] and demand will uh get in balance. Uh so [24:37] I see uh healthy demand supply [24:40] environment here uh you know going [24:42] forward for the factors related to [24:45] demand as well as uh for supply and that [24:48] obviously bodess well uh for the [24:50] industry pricing environment. Overall, [24:52] the industry demand supply environment [24:55] and the outlook is in a very healthy [24:58] place here. [24:59] >> Micron isn't alone in warning about [25:01] continued shortages. A few months ago, [25:03] Samsung said the RAM shortage could last [25:05] into 2028. Similarly, SKH said memory [25:09] demand would exceed supply through 2030. [25:11] Micron killed Crucial in December of [25:14] 2025 to put a date to it, which is now [25:18] the prelude to what's going to be a [25:20] yearslong memory shortage for consumers. [25:22] We're about one year out from when [25:24] consumer memory prices really started to [25:26] noticeably spike at the front end for [25:28] all of us due to the AI data center [25:31] buildout. And there's no end in sight [25:33] right now. For the memory companies, AI [25:35] data centers are the best customers and [25:37] Micron is all aboard the AI train. It's [25:39] the importance of memory in the AI era. [25:43] Memory is critical for AI. Faster [25:46] memory, more me memory will enable that [25:48] those kind of safe operations can be [25:50] performed at performance that is needed [25:52] to grow AI. Memory really is critical [25:56] for super intelligence. [25:58] >> So the memory shortage is going to wait [26:00] a minute. Did he just say what I think [26:04] he did? [26:05] >> AI. [26:05] >> Oh, we we got him. This is good news. [26:08] All right. It's breaking news here. Not [26:10] sure if you saw it, but anyone who says [26:13] AI, [26:16] it's too late now. Is the enemy. [26:20] Micron CEO just called it AI. It's SI [26:25] now or as Trump pronounces it. [26:28] >> Okay. Sigh. Like sigh. Okay. [26:31] >> He doesn't mean like the duck. Uh [26:35] I don't know. I don't know where to go [26:36] with this. It's just it's this is so [26:40] absurd at this point. We've been talking [26:42] about this for over a year and I I guess [26:46] at this point we're really just [26:47] cataloging and documenting what's [26:49] happening and I I I hope I guess there's [26:54] a call to action here. There's [26:57] a a small call to action uh and it's [27:00] coming up in November for those of you [27:02] in the United States. So that's about I [27:07] don't know like the problem with this [27:09] is they're all so corrupt [27:13] in my opinion. The companies and how [27:16] they work with the politicians at this [27:17] point. I mean it is ungodly amounts of [27:20] money that they spend on lobbyists and [27:23] just straight up donate to special [27:25] projects and special interests in [27:27] government. And it wasn't always like [27:30] this. There's been money in government [27:33] and companies like Micron have been able [27:36] to use that to their advantage. But if [27:37] you look at the political contributions [27:40] of companies like AMD and Nvidia and [27:43] even Micron, you'll notice that in just [27:46] the last few years alone, it's really [27:49] skyrocketed. [27:51] And uh in some cases, I think it was [27:53] AMD, the first contributions that [27:55] they've made of any meaningful amount in [27:58] decades. Uh but anyway, there's a bit of [28:01] a [28:03] a bit of a call to action with November [28:05] coming up. And um other than that, I [28:08] don't know. It's going to take [28:10] unfortunately I haven't seen a I would [28:12] tell you about policy that I think would [28:14] help if I knew of any that existed. [28:16] There's stuff out there for ownership or [28:18] for reducing, for example, the impact of [28:21] the DMCA section 121, but there's not [28:24] like something I I've personally seen [28:27] that would help with this with the [28:29] memory pricing, the memory problem. Um, [28:32] please let us know if there's some [28:33] policy you know about that we could look [28:34] into and cover and, you know, give some [28:36] attention if it's going to do something [28:38] good. Uh, but otherwise, that's going to [28:40] be it for this one. Thanks for watching. [28:44] Subscribe for more. go to [28:46] store.gamersac.net to help us out [28:47] directly. Uh I I wish I could do more [28:49] computer videos, like reviews and [28:52] hardware, and we're doing plenty of [28:53] computer videos, I guess. It's just I'll [28:55] tell you what, my life was a lot easier [28:58] when I could post like five reviews a [29:01] week that all did pretty damn good [29:04] views. And we just got to talk about [29:06] cool computer stuff, but no one can [29:08] buy it. That's the problem. Like [29:12] the cost of cases is low because they're [29:13] made out of metal. some made out of [29:15] silicon. [29:17] But it doesn't matter if the cost of the [29:19] case is $30 lower than it might have [29:22] been if the cost of memory factors in [29:26] 90% margin. [29:30] Insane. Thanks for watching. We'll see [29:32] you all next