Micron has experienced a massive surge in traditional memory profitability as AI servers consume global production capacity. While tech companies focus heavily on high bandwidth memory, a supply shortage has turned standard computer memory into the biggest winner of the current hardware cycle. A recent research report from UBS reveals that standard DRAM gross margins at Micron are actually eclipsing the margins of specialized AI memory.
The margin expansion for standard memory has been exceptionally rapid. The UBS study shows Micron standard DRAM margins climbing from around 44% to 50% in 2025 up to 80% in February 2026. This upward trajectory continued with margins hitting 89% in May and 91% in August. Projections point to 92% by the close of 2026. Looking further ahead, margins are expected to peak between 93% and 95% in 2027. They will likely stay above 93% for most of 2028.
This performance looks very different from specialized High Bandwidth Memory, which is often viewed as the premium sector. Micron HBM margins hovered between 56% and 63% in 2025, rising to a range of 63% to 70% in 2026, and are projected to reach 75% to 78% in 2027. The primary reason standard memory has become more profitable lies in manufacturing complexity. High Bandwidth Memory requires far more silicon dies and intricate fabrication steps. This process severely restricts the volume of standard memory that factories can output on the same production lines.
The supply constraint is meeting an unprecedented surge in demand on the client side. AI servers do not just require High Bandwidth Memory for graphics processors. They also need massive amounts of DDR5 memory for the system central processors. This dual demand has created a scenario where AI hardware and traditional servers are actively competing for the same limited pool of silicon wafers. The 3 major memory manufacturers continue to allocate their advanced production lines to AI hardware. This keeps standard memory supply tight and ends up passing higher costs down to general enterprise buyers.
Even with standard memory leading in margins, Micron is still expanding its High Bandwidth Memory footprint. Quarterly shipments are projected to scale from 0.1 exabytes in early 2025 up to 0.29 exabytes by the end of 2026. The volume will likely reach 0.43 exabytes in late 2027. The total global market for this specialized memory is estimated at 2.1 exabytes. Within this landscape, Micron expects its market share to settle at 22% to 23% by late 2026. This share will likely dip to 18% in 2027 before recovering to 21% by the close of that year. Throughout this expansion, the company standard memory market share is expected to hold steady at 23% to 24%.
