Micron Technology Forecasts Robust AI-Driven Demand Growth Beyond Fiscal 2026

Sustainability of AI-Driven Demand Growth Beyond Fiscal 2026

Micron Technology's management has provided a detailed outlook on the sustainability of AI-driven demand growth across data centers, smartphones, and PCs extending beyond fiscal 2026. The key points are as follows:

1. Broad and Growing AI Demand Vectors

• AI demand is broadening beyond just data center training to include inference workloads, traditional servers, edge devices such as AI-enabled smartphones, and AI-enabled PCs.
• Smartphones are increasingly shipping with higher DRAM content, especially AI-ready models with 12GB or more DRAM.
• PCs are benefiting from AI adoption and the end of life of Windows 10, driving mid-single-digit unit shipment growth expectations in 2025.
• Automotive and embedded markets are also seeing increased memory content driven by AI applications like ADAS and in-cabin experiences.

2. Strong and Durable Demand Outlook

• Management emphasizes strong AI trends across data center, smartphones, and PCs, leading to robust demand through fiscal 2026 and beyond.
• They expect trillions of dollars to be invested in AI over the coming years, with memory being a critical component.
• Data center demand, including both AI and traditional servers, is expected to continue growing, supported by strong DRAM content growth.

3. Supply Constraints Supporting Tight Market Conditions

• Industry DRAM supply is expected to remain tight into 2026 due to structural factors such as constrained node migration, extended lifecycle of existing nodes (d4 and LP4), and the high cost and long lead times for new clean room capacity.
• Micron is investing heavily in DRAM capacity expansion, including new fabs and advanced nodes (one gamma DRAM, HPM4), but supply growth will be measured.

4. Product Leadership and Technology Transition

• Micron is ramping advanced products like HBM4 and one gamma DRAM, which are critical for AI workloads requiring high bandwidth and power efficiency.
• The company expects HPM (High Performance Memory) bit growth to outpace overall DRAM bit growth, reflecting the increasing value and demand for AI-optimized memory.
• AI-driven demand is also driving higher DRAM content in smartphones and PCs, with new product launches supporting this trend.

5. Financial and Operational Positioning

• Micron expects to maintain a healthy demand-supply balance in 2026, with tight supply supporting pricing and profitability.
• Capital expenditures will increase to support DRAM front-end equipment and fab construction, enabling supply growth aligned with demand.
• Customer inventories are healthy but supplier inventories are lean, indicating strong pull-through demand.

Summary

Management clearly articulates a sustainable and broad-based AI-driven demand growth outlook across data centers, smartphones, and PCs beyond fiscal 2026. This growth is supported by:

• Expanding AI applications and architectures
• Increasing DRAM content in AI-enabled devices
• Structural supply constraints limiting rapid capacity expansion
• Micron's leadership in advanced memory technologies
• Strong financial and operational execution

Therefore, the sustainability of AI-driven demand growth beyond fiscal 2026 is expected to remain robust, underpinned by both secular AI adoption trends and Micron's strategic positioning in the memory market.