Micron’s $133 Billion Year Comes With a Capacity Race

Micron booked $133.19 billion in fiscal 2026 revenue, 3.5 times the prior year, as AI memory prices stayed elevated. The Boise company also guided fiscal first-quarter revenue to $61.5 billion, plus or minus $1.5 billion, after a fourth quarter of $54.23 billion.

Those figures are why some investors now talk about a decade-long trade in the shares. They landed in the same week Counterpoint still had Micron third in high-bandwidth memory, and in the same month Samsung and SK hynix laid out larger wafer plans.

Micron Just Printed a $133 Billion Year

Fiscal 2026 ended September 3. In its record fiscal 2026 results, Micron reported GAAP net income of $84.97 billion, or $74.33 a diluted share, against $8.54 billion, or $7.59, a year earlier. Non-GAAP earnings were $75.52 a share.

The fourth quarter did most of the work. Revenue rose 31% from $41.46 billion in the third quarter and 379% from $11.32 billion a year earlier. GAAP gross margin hit 86.8%, and the non-GAAP figure was 87.0%. GAAP operating margin was 80.7%.

Chairman and CEO Sanjay Mehrotra said fiscal 2027 should be stronger still. DRAM revenue for the year surpassed $100 billion for the first time. Operating cash flow was $89.68 billion, against $17.53 billion in fiscal 2025, and adjusted free cash flow was $62.31 billion after $27.37 billion of net capital spending.

THE FISCAL 2026 PRINT

Core Data Center was the largest unit in the quarter, at $18.00 billion, up from $1.58 billion a year earlier, with a 90% gross margin. Cloud Memory added $16.28 billion. Mobile and Client contributed $13.11 billion, and Automotive and Embedded $6.82 billion. Data-center SSD revenue in the quarter was nearly $10 billion, more than ten times the year-ago period and more than two-thirds of NAND sales.

$32 Billion in Deposits Sits on the Order Book

The bull case no longer rests only on spot DRAM prices. Micron has been signing multi-year take-or-pay deals it calls Strategic Customer Agreements, and the book is now large enough to show up in the cash line.

HOW THE AGREEMENTS ARE BUILT

• The count: Management said it has signed 26 of the deals, with some already extended into 2031.
• The coverage: Those contracts are estimated at over 35% of revenue through 2030.
• The pricing: Three-quarters of that estimated revenue has a defined pricing framework, and most of those use floor and ceiling bands.
• The cash: Customer financial commitments have risen to $32 billion, the vast majority as cash deposits.

Micron ended the year with $73.48 billion in cash, marketable investments, and restricted cash. That pile is not only earnings. It is customers paying up front to keep a place in line.

The structure cuts both ways. Take-or-pay terms make the next few years less of a pure spot-market bet than 2018 ever was. They also mean the customers writing those checks, the same hyperscalers buying Nvidia and AMD accelerators, now carry more of the inventory risk if their own buildout slows. New talks, Mehrotra said, are being struck at higher prices based on the current market.

Third Place in the Product That Built the Boom

High-bandwidth memory is the product everyone uses to explain the print, and Micron is still not the share leader. Counterpoint’s revenue split for the second quarter put SK hynix at 50%, Samsung at 33%, and Micron at 18%.

HBM REVENUE SHARE, COUNTERPOINT

Samsung’s jump in a single quarter, from 21% to 33%, is the line that does not fit a “Micron owns HBM” story. SK hynix still leads, but its gap over Samsung shrank from 37 points to 17. Micron’s slice slipped three points. Rounded shares in that survey add to 101% in the second quarter.

Company remarks still put HBM at the center of the mix. HBM revenue in the fourth quarter grew faster than the company as a whole. Management said it has completed agreements for the vast majority of calendar 2027 HBM bit supply, with price increases against the year before, and that those deals should narrow HBM’s gross-margin gap with conventional DRAM. That gap is the quiet tell. HBM filled the factories, but it has not been the fattest-margin product in the book this cycle. The 2027 contracts are where that is supposed to change.

The hardware is real. Micron has HBM4 36GB stacks in volume production for Nvidia’s Vera Rubin platform, with a 2,048-bit interface, pin speeds above 11 Gb/s, and greater than 2.8 TB/s of bandwidth per stack, plus a claimed 20% power gain against its own HBM3E. It is also working with Nvidia on a custom HBM4E design, NVHBM, for the next GPU generation. Qualification still runs through a small set of accelerator customers, which is why a share table can move this fast when Samsung’s yields improve.

The 2018 Peak Never Got Near These Margins

Memory bulls have used “supercycle” before. The last time Micron called a year a record in this way, the hangover showed up inside 12 months.

Company filings put fiscal 2018 revenue of $30.39 billion, with a GAAP gross margin of 58.9% for the year and 61.0% in the fourth quarter. GAAP net income was $14.14 billion. Fiscal 2019 revenue then fell to $23.41 billion, a 23% drop, as prices gave back the shortage. Gross margin was 38.2% three quarters after that 61.0% peak and 28.6% a quarter later. The 2021 upswing topped out at a 47.3% gross margin and later went negative.

Fiscal 2026’s 80.7% GAAP gross margin, and an 87.0% non-GAAP quarter, sit more than 20 points above any of those peaks. The demand story is different too. It is AI accelerators and data-center SSDs, not phones adding a few gigabytes. HBM also burns more wafer capacity per bit than commodity DDR, which is why a shortage in stacks tightens ordinary DRAM at the same time.

The rhyme is on the supply side. High prices still pull in capital. In 2017 and 2018 the three suppliers kept wafer growth in check for a while, then added enough that 2019 became a glut. The contracts and the harder packaging of HBM slow that response. They do not repeal it.

Samsung and SK Hynix Are Adding Wafers Too

The second-order problem is already visible in Korea. Samsung plans to lift HBM wafer input from 180,000 sheets a month this year to 250,000 next year, a 40% increase, and to push HBM4-class products to 80% of its HBM shipments. Yield on HBM4, which had been below 60% in early production, is now described around 80%. That is the mechanical reason its revenue share jumped.

SK hynix is not standing still. It plans to take Cheongju M15X from about 10,000 wafers a month toward 80,000, and to open the first cleanroom at its Yongin cluster in early 2027. Industry commentary around those plans still has next year’s HBM demand growing faster than supply, on the order of 56% versus 50%, which is a tight market, not a glut. It is also the same chart the industry always draws at the top of a shortage: demand ahead of supply, so every producer adds.

WHERE THE NEW WAFERS ARE AIMED

• Samsung: HBM input 180,000 to 250,000 wafers a month, with HBM4-class mix at 80% of HBM shipments.
• SK hynix: M15X ramping toward 80,000 wafers a month, Yongin first fab slated for early 2027.
• Micron: Idaho ID1 wafers in mid-2027, Taiwan Tongluo shipments in mid-2027, Singapore HBM packaging in early 2027.

Conventional DRAM is already feeling the diversion. As the Koreans steer scarce wafers into HBM and server parts, PC and phone DRAM have tightened, and TrendForce has pointed to contract-price gains of as much as 18% in a single quarter. China’s CXMT taking a 10% slice of DRAM revenue in the second quarter is a sideshow next to HBM, but it is another source of bits at the low end if prices ever crack.

What the Next Quarter Already Prices In

Micron’s own guide assumes the squeeze holds. For the first quarter of fiscal 2027 it put revenue at $61.5 billion, plus or minus $1.5 billion, with non-GAAP gross margin around 86.25% and non-GAAP earnings of $38.15 a share, plus or minus $1.00. That is another sequential record on the heels of six straight quarterly revenue records.

Micron delivered record fiscal 2026 results, and we expect an even stronger fiscal 2027.

Sanjay Mehrotra, Chairman and CEO, fiscal fourth-quarter call

On the call, management said memory and storage should be much tighter in calendar 2027 and 2028 than in 2026. It sees industry DRAM bit shipments growing in the mid-20s percent this calendar year and in the low-20s in 2027 and 2028, with the market still short. NAND bits are seen in the low-20s this year and the mid-20s in the next two. HBM bits, it said, should grow faster than conventional DRAM through 2028. Server units are expected to rise in the high teens in both 2026 and 2027, even as content growth per box is a bit slower because the chips are scarce.

Shares closed at $1,074.89 on October 2, a day after the report, for a market value of about $1.21 trillion. That is 14.5 times fiscal 2026 GAAP earnings of $74.33 a share. The 52-week range is $179.61 to $1,255.00. The stock popped on October 1, then gave some of it back, which is what a name does when the beat is no longer the surprise and the argument has moved to how long 86% margins can last.

The board kept the quarterly dividend at $0.15 a share, payable October 29 to holders of record October 14. Against $73.48 billion of cash, that check is a rounding error. Management has said it expects, over time, to return 100% of excess cash to shareholders. The first call on that cash is still the fabs.

New Fabs Do Not Show Up Until Mid-Decade

This is the part of the decade-trade pitch that is easiest to skip and the part that decides whether 87% margins were a moment or a base. New cleanroom does not become bits in a quarter.

WHEN MICRON’S NEW OUTPUT STARTS

1. Early calendar 2027: Singapore HBM advanced packaging, cleanroom work ahead of plan.
2. Mid-calendar 2027: Idaho ID1 first wafers; Taiwan Tongluo product shipments.
3. Late calendar 2028: Idaho ID2 wafers; Japan DRAM expansion first output.
4. Second half of calendar 2028: New Singapore NAND facility begins output.
5. Calendar 2030: First New York fab wafers, after a concrete-pour milestone last quarter.

Management was plain that production from new DRAM and NAND plants ramps over several quarters after the first wafer. Through 2027, in other words, most of the revenue still has to come from the plants that are already running, from richer mix, and from the 2027 HBM prices already signed. That is also why a three-way add of HBM wafers in Korea and the United States can look small on a 2026 shortage chart and large on a 2028 one.

Idaho, Virginia, and New York are the U.S. supply story Micron is selling to the same customers writing the $32 billion in deposits. Geographically split output is a real selling point for data-center buyers. It is also more capital, more time, and more bits that will need a home if accelerator demand ever grows slower than the floor prices in those contracts.

The print is not a rumor. $133.19 billion of sales, 87.0% non-GAAP gross margin, and a sold 2027 HBM book are on the page. So is an 18% HBM share, a Samsung yield recovery, and a wafer race that every prior boom eventually funded. The contracts make this cycle less of a pure spot bet than 2018. They do not make the new cleanrooms disappear.

Disclaimer: This article is news reporting and analysis of Micron’s public results, management remarks, and industry data, and it is for information only. It is not investment advice, a solicitation, or a recommendation to buy or sell Micron shares, options, or any other security, and it does not weigh any reader’s goals, finances, or risk tolerance. Anyone considering a position in semiconductor stocks should speak with a licensed financial adviser or broker before acting. Revenue, margins, guidance, contract figures, share splits, and market prices reflect the company materials and market data cited here as of the dates given above and can change with later results, revisions to customer agreements, and trading.