Industry forecasts indicate the global memory shortage will persist through 2028, as Nvidia reportedly secures multi-year exclusive supply agreements with major memory manufacturers.
Research firm Edgewater Research reports that Nvidia may have signed multi-year supply agreements with SK hynix and Micron to secure HBM and DRAM capacity, as the memory shortage is projected to extend to 2028. The move comes amid warnings from MSI and AMD that memory constraints will persist well beyond 2026. Long-term supply agreements are becoming standard practice, with Samsung and SK hynix reportedly shifting away from one-year contracts toward three-to-five-year deals. Micron separately announced a $10 billion investment in a research lab in Boise, Idaho, while CEO Sanjay Mehrotra said data-center customers want 50% more supply than the company can commit. Wall Street analysts have issued bullish ratings on Micron, with price targets ranging from $1,300 to $1,550.
Edgewater Research said in a recent note that "feedback suggests NVDA likely signed a multi-year supply agreement for DRAM/HBM" with the two memory makers, according to a report from technology publication Wccftech. The move follows Nvidia’s previous trimming of its DRAM demand forecast, which indicated that its next-generation Rubin AI chips may use less memory than initially expected. Even so, the broader AI infrastructure cycle continues to drive unprecedented demand for high-bandwidth memory and DRAM.
The supply-demand imbalance has become a central theme in the semiconductor industry. Dan Ives, senior managing director at Yorkville Ives, told CNBC that the ratio of demand to supply for memory in the AI sector is roughly 15 to 1. "Memory players, right now it's their world and everyone else is paying rent," Ives said. He added that companies such as Apple are already paying more for memory as both demand and prices climb. Ives dismissed concerns that Chinese competitors or alternative technologies could disrupt the current market structure, which remains dominated by South Korean suppliers. "Korea holds the cards when it comes to memory," he said. Asked about the risk of overordering or inventory buildup, Ives said there are no immediate worries, describing the situation as "starting to play out from a bull case scenario."
Samsung, SK hynix, and Micron together control roughly 89% of the global DRAM market, leaving buyers with few alternative suppliers when the three tighten capacity in tandem. (Data: Counterpoint Research, via 24/7 Wall St.)
The shortage timeline has become a key point of debate across the industry. MSI's chairman warned earlier this year that the memory crunch could last through all of 2026 and has already begun disrupting the consumer market. AMD went further, forecasting that memory prices may not stabilize until 2028. Edgewater Research noted that memory pricing for calendar year 2027 is unlikely to be finalized until the end of 2026, suggesting that more long-term agreements could be announced in the coming months. Independent market research points to a similarly extended timeline. TrendForce projects that HBM wafer input at Samsung, SK hynix, and Micron combined will climb from 22% of total DRAM wafer capacity at the end of 2026 to 30% by the end of 2027, leaving conventional DRAM supply able to meet only about 60% of projected demand by that point. UBS does not expect the broader DRAM market to return to balance until the second quarter of 2028, even as Samsung and SK hynix have jointly committed roughly 800 trillion won (about $518 billion) to four new memory facilities slated to begin production in 2027 and 2028.
Long-term supply agreements, or LTAs, are emerging as the preferred mechanism for both buyers and sellers. Edgewater Research said these contracts give memory manufacturers greater certainty about future demand, making them more willing to commit capital to capacity expansion. The firm also cited market chatter that Samsung Electronics and SK hynix have stopped signing one-year short-term agreements, instead favoring contracts spanning three to five years. The capital-intensive nature of memory manufacturing reinforces the case for longer contracts. Building new semiconductor fabs takes several years from groundbreaking to volume production, and the industry's historical cyclicality has made manufacturers hesitant to invest without clear demand visibility. LTAs help bridge that gap by providing contractual certainty.
Micron Technology is moving to capitalize on the AI-driven memory boom with a major research investment. The company announced a $10 billion commitment over the next decade to establish Micron Research Labs, headquartered in Boise, Idaho. The flagship campus is expected to break ground in 2027 and will house hundreds of researchers focused on memory technology, advanced compute architectures, chip packaging, and future semiconductor manufacturing processes. The $10 billion research initiative is separate from Micron's previously announced plan to invest more than $250 billion in U.S. manufacturing and R&D through 2035. That broader program is expected to create more than 90,000 jobs. Micron CEO Sanjay Mehrotra underscored the strategic importance of memory in the AI era during an interview with CNBC's Jim Cramer. "Today there is no AI without memory," Mehrotra said. He revealed that data-center customers are requesting roughly 50% more supply than Micron can currently commit, quantifying the scale of the demand surge. Mehrotra described memory as "the strategic infrastructure of the AI era," pointing to autonomous vehicles and other AI-powered devices as additional demand drivers beyond data centers.
The research lab announcement drew endorsements from two of Micron's most important customers. Nvidia CEO Jensen Huang called memory reinvention "one of the great challenges of the AI era," while Apple CEO Tim Cook also voiced support for the initiative. Analyst sentiment on Micron has turned decidedly bullish as the memory shortage shows no signs of easing. BMO Capital initiated coverage of Micron with an Outperform rating and a $1,300 price target, citing a "prolonged memory supercycle" driven by tight supply and "exceptionally strong" demand. The firm noted that Micron is seeing growth across all its major product lines. Bank of America analyst Vivek Arya holds a Buy rating with a $1,550 price target, projecting that Micron could generate more than $230 in earnings per share by fiscal 2030. The broader Wall Street consensus is a Strong Buy, based on 29 Buy ratings and one Hold, with an average price target of $1,568.39 — implying approximately 61% upside from Thursday's close of $974.33.
Upside calculated from Thursday's closing price of $974.33. Micron shares have surged about 234% year-to-date, though the pace of gains has moderated recently as investors weigh the sustainability of AI spending and competitive pressure from SK hynix in the HBM segment. The stock rose 2.3% following the research lab announcement. The memory sector's transformation from a traditionally cyclical business to one potentially driven by secular AI demand growth remains an open question. Edgewater Research's observation that 2027 pricing won't be determined until late 2026 suggests the industry is entering a period of extended negotiation and contract restructuring. For Nvidia, securing multi-year supply from both SK hynix and Micron would provide critical visibility into component availability as it ramps production of next-generation AI accelerators.
Ives framed Nvidia's upcoming quarterly earnings report on Aug. 26 as a potential "planting the flag moment" for the AI trade. He argued that investors are underestimating the scope of Nvidia's ambitions, particularly in physical AI applications. "You're almost giving them minimal credit for physical AI," Ives said. Using his characteristic baseball analogy, he suggested the AI trade may be only in "the bottom of the second inning" rather than the seventh. Ives also praised Nvidia CEO Jensen Huang, comparing betting against him to betting against Tom Brady. The convergence of Nvidia's supply-chain moves, Micron's research investments, and the industry