Micron warns memory chip shortage will extend beyond 2026

Monday 19 January 2026 - 15:50

By: Dakir Madiha

Micron warns memory chip shortage will extend beyond 2026

Micron Technology has issued a stark warning that a global memory chip shortage has reached unprecedented levels and will persist beyond 2026. Surging demand for AI infrastructure is overwhelming production capacity, sidelining consumer electronics in the process.

Manish Bhatia, Micron's executive vice president of operations, described the shortage as truly unprecedented during an interview on Friday following the groundbreaking of a $100 billion production facility near Syracuse, New York. This alert builds on a similar forecast the company shared in December.

High-bandwidth memory (HBM) essential for AI accelerators is consuming so much industry capacity that it triggers severe shortages in conventional sectors like smartphones and PCs, Bhatia explained. Micron executives note that producing HBM requires about three times more wafer capacity per gigabyte than standard DRAM.

Consumer device makers are already reeling. Chinese media Jiemian reported Friday that major smartphone brands including Xiaomi, Oppo, and Shenzhen Transsion Holdings are slashing 2026 shipment targets due to soaring memory costs, with Oppo potentially cutting forecasts by up to 20 percent. Sina.com indicated Xiaomi and Oppo reduced volumes by over 20 percent, while Vivo trimmed projections by around 15 percent.

PC manufacturers face similar strains. Dell Technologies announced price hikes of 15 to 20 percent, and Lenovo warned clients that current prices will expire on January 1, 2026. Contract DRAM prices surged 171.8 percent year-over-year in Q4 2025, according to Tom's Hardware.

The world's top three memory chip makers Micron, SK Hynix, and Samsung Electronics have seen stock prices soar amid the AI boom, yet supply constraints linger. SK Hynix sold out its 2026 chip production, and Micron's AI memory semiconductors are fully booked for the year.

To prioritize enterprise clients like Nvidia, Micron announced in December it would halt production of its popular consumer-branded Crucial memory line.

Micron is aggressively expanding to address the imbalance. The Syracuse site will house four DRAM fabs—each the size of 10 football fields—with initial wafers expected by 2030. The company also plans to spend $1.8 billion on a Taiwan site, targeting significant DRAM wafer output in the second half of 2027.

SK Hynix is accelerating its growth, investing about $13 billion in a new advanced assembly facility in Cheongju, South Korea, and advancing a factory opening to February 2027, three months ahead of schedule.

IDC research director Jitesh Ubrani predicts memory price stabilization may not occur until late 2027. "This could take much longer than we anticipated," he told The Register. Counterpoint Research forecasts a 2.1 percent decline in global smartphone shipments this year as shortages drive up costs and disrupt output.