Micron Technology
Memory scarcity drove Micron to 67% margins as HBM demand outstrips supply through 2026 and beyond.
Micron's $13.6 billion quarterly revenue in Q1 2026 (up 57% year-over-year) reveals what happens when commodity markets hit genuine scarcity. DRAM prices don't just rise—they explode when supply can't meet demand. The company's HBM (high-bandwidth memory) production is sold out through 2026, with the total addressable market expanding from $35 billion in 2025 to projected $100 billion by 2028. This is exponential growth driven by AI infrastructure, where memory bandwidth became the limiting factor for training models. Micron's gross margins expanded to 67% (up from 41% in fiscal 2024), demonstrating how quickly commodity economics transform under genuine scarcity.
The biological lesson is boom-bust population cycling in resource-limited environments. Memory chipmakers operate in synchronized cycles: everyone invests in capacity during booms, creating oversupply and price collapse, then cuts investment during busts, creating the next shortage. Micron survived the 2024 trough (revenue down 23%) by controlling supply—the company can only meet 50-66% of DRAM demand even while ramping production. This is strategic restraint: refusing to fully satisfy demand maintains pricing power. The HBM bottleneck is structural, not cyclical: each HBM module requires 3x the wafer space of standard DDR5, and technology transitions (1-gamma DRAM, G9 NAND) constrain how fast bit production can grow.
But boom cycles create vulnerability through maladaptation. When memory sells faster than you can produce it, the temptation is building massive capacity. Yet Micron learned from past collapses: fiscal 2025 CapEx stayed around $5 billion rather than exploding. The company pursues multi-year supply commitments rather than spot market optimization. This is the difference between r-selection (maximize reproduction during favorable conditions) and measured growth that survives the inevitable crash.