Micron DRAM Margin to Hit 95%, Surpass HBM

According to a latest research report from foreign investment bank UBS, Micron’s gross margin for general-purpose DRAM has officially surpassed that of high-bandwidth memory (HBM), which is specifically designed for AI applications, driven by a severe supply shortage in the memory market.

UBS noted that Micron’s general DRAM gross margin has experienced remarkable growth. In 2025, the margin was estimated at around 44% to 50%. By February 2026, it surged to approximately 80%, and from May to August 2026, it further increased to 89% and 91%. UBS expects Micron’s general DRAM gross margin to reach about 92% by the end of 2026 and peak at 93% to 95% in 2027, remaining above 93% for most of 2028.

By comparison, HBM, which has long been regarded as a premium memory product with higher profitability, is expected to see a more moderate margin expansion. UBS estimates HBM gross margins at approximately 56% to 63% in 2025, rising to 63% to 70% in 2026, and reaching 75% to 78% in 2027.

The report highlighted two major factors behind general DRAM’s margin growth surpassing HBM. First, the manufacturing complexity of HBM has significantly affected overall DRAM production capacity. HBM requires advanced wafer stacking technologies and highly complex packaging processes, consuming substantial manufacturing resources and reducing available capacity for general-purpose DRAM production.

Second, the memory industry is facing a dual demand surge. While AI servers require HBM for GPU acceleration, they also rely heavily on conventional DDR5 memory to support CPU operations. This has intensified competition between HBM and general DRAM for limited DRAM wafer capacity.

With the three major DRAM manufacturers having previously prioritized advanced DRAM production capacity for HBM development, the supply of standard DRAM has remained constrained. This supply imbalance has pushed general DRAM prices and profitability significantly higher.

Despite the current profitability advantage of general DRAM, Micron continues to expand its HBM business. UBS forecasts that Micron’s quarterly HBM shipments will increase from 0.1 exabytes (EB) in early 2025 to 0.29 EB by the end of 2026, and further rise to 0.43 EB by the end of 2027.

In the global HBM market, which is expected to reach approximately 2.1 EB in total capacity, Micron’s market share is projected to reach 22% to 23% by the end of 2026. Although its share may temporarily decline to around 18% in 2027, it is expected to recover to approximately 21% by year-end. Meanwhile, Micron’s market share in the general DRAM segment is expected to remain stable at around 23% to 24%.

The latest market trends indicate that AI-driven demand is reshaping the memory industry, creating strong profitability across both HBM and conventional DRAM segments as manufacturers balance AI infrastructure needs with broader computing demand.