Micron says most of next year’s supply is already committed, and market trackers see prices rising into 2027.
The global memory shortage that has driven up the cost of servers, storage and PCs through 2026 will get worse in 2027 and 2028, according to memory maker Micron Technology.
“We expect memory and storage supply-demand conditions to be much tighter in calendar 2027 and 2028 than they were in 2026,” CEO Sanjay Mehrotra said in prepared remarks for the company’s fiscal fourth-quarter earnings call.
Even with new cleanroom space planned across the industry, “We do not have line of sight to when supply and demand will return to balance,” he said. Earlier industry forecasts had expected the two to return to balance in 2028.
Mehrotra added that new plants would not bring quick relief. “Production from new DRAM and NAND fabrication facilities takes time to ramp and gradually becomes more meaningful starting a few quarters after initial output,” he said.
Neil Shah, vice president of research at Counterpoint Research, said the outlook means CIOs “will have to be prudent about which equipment to upgrade and which to stretch to maintain cost efficiencies.”
Higher prices, less memory
On the same call, CFO Mark Murphy said Micron’s “inventory levels and supply remain extremely tight.” Its DRAM prices rose by a percentage in the high teens in the fiscal fourth quarter, while NAND prices climbed about 30%, he said.
Taiwan-based market research firm TrendForce expects prices across the industry to keep rising. In a Sept. 30 report, it forecast that conventional DRAM contract prices will increase another 10% to 15% in the fourth quarter from the third. It expects NAND flash prices to climb 15% to 20%. The firm said increases are slowing but the market remains undersupplied.
IDC expects PC buyers to pay more as well. The research firm forecast in June that average PC selling prices will rise 17% in 2026.
TrendForce has also tracked a shift toward less memory per server. Cloud providers and OEMs have moved some servers from 96GB and 128GB memory modules to 32GB and 64GB modules since the first half of 2026, the firm said in a July report. Analysts had warned in January of higher prices and lower memory specifications for enterprise PCs.
Supply committed years ahead
Micron has already committed more than 75% of its 2027 output, and most of its customer discussions now concern 2028, Mehrotra told analysts on the call.
Much of that supply is locked into multiyear, take-or-pay contracts that Micron calls strategic customer agreements (SCAs). “Any new discussions on SCAs where pricing is involved are negotiated with higher pricing based on prevailing market conditions and outlook,” Mehrotra said.
Some cloud providers have signed similar long-term agreements with memory makers, TrendForce said in its July report. That has left buyers without such deals as the main source of server DRAM price increases, it said.
Shah said enterprises should lock in pricing too. “Companies should secure multiyear pricing for the computing capacity they know they will need,” he said. Moving workloads to the cloud will not avoid rising hardware and energy costs “because providers will pass them on,” he added.
Which refreshes to delay
When it comes to replacing existing equipment, Shah said, the right call depends on the workload. “For general back-office PCs and routine file servers, stretching lifecycles from three years to five is harmless,” he said. “But for core infrastructure and engineering seats, delaying refreshes can backfire.” Aging equipment can drag on productivity, lose software support and fail more often, he added.
Shah also cautioned against turning to older memory to save money. Memory makers have been converting production lines to high-bandwidth memory and DDR5, so DDR4 is no longer cheap or plentiful, he said. “If you buy legacy platforms today to shave 10% off upfront server costs, you’re buying into systems which won’t have serviceable parts two years from now.”
He recommended starting with the hardware already in place. “Enterprises often waste 30% to 50% of memory by provisioning for peaks that rarely occur,” he said. Right-sizing virtual machines, quantizing AI models and batching workloads more efficiently can cut memory use significantly, according to Shah.
Before buying more hardware, he said, “CIOs should think about optimizing on the silicon already in place.”
What hardware vendors say
Hardware vendors had no helpful advice to offer budget-constrained buyers.
Lenovo did not answer questions directly but pointed to remarks executives made on its Aug. 13 earnings call.
Chairman and CEO Yuanqing Yang said then that he expects memory demand to keep rising and supply to remain constrained at least through the end of 2027. He said Lenovo can respond quickly to rising component costs: “When the material costs rise, we can adjust the pricing at the front end in a timely manner.”
Luca Rossi, president of Lenovo’s Intelligent Devices Group, said he expects the PC market to shrink about 15% in units in the six months to March, with business demand holding up better than consumer demand.
On the server side, Ashley Gorakhpurwalla, president of Lenovo’s Infrastructure Solutions Group, said a “strong server refresh cycle is underway.”
Dell, HPE, HP, Cisco and Supermicro did not respond to requests for comment by publication time.
