Micron Says It Can't See When Memory Prices Come Down. A Lawsuit Says That's Not an Accident.

Micron told investors on September 30 that memory chips will only get scarcer through 2028, two days after posting fiscal fourth-quarter revenue of $54.23 billion, up 379 percent from a year earlier. Three months before that earnings call, a federal lawsuit accused Micron and its two biggest rivals of manufacturing the exact shortage the company was about to describe as unavoidable.

What Mehrotra actually told investors

Mehrotra, Micron's chairman and CEO, did not frame 2027 as a cooldown. "In calendar 2027 as well as 2028, we see demand exceeding supply," he said on the earnings call, according to The Register. "In fact, we see greater tightness in the industry in 2027 and in 2028 versus 2026. Overall, the supply-demand environment is only getting tighter." He said more than 75 percent of Micron's fiscal 2027 output is already committed to customers, who will pay what he called much higher prices than they did this year.

“We do not have line of sight to when supply and demand will return to balance.”

Micron has budgeted $25 billion in capital spending for the first half of its new fiscal year, aimed partly at new factories. Those plants are not expected to produce wafers until 2028, and executives have said the added capacity will not immediately lower prices even once it arrives.

The case that says the shortage isn't just physics

On June 25, seventeen plaintiffs, including 14 individuals and small PC repair businesses, sued Micron, Samsung and SK Hynix in the U.S. District Court for the Northern District of California. The case, Garciaguirre v. Samsung Electronics (3:26-cv-06345), invokes Section 1 of the Sherman Act and argues the three companies, which together hold roughly 90 percent of the global DRAM market, used their shift toward high-bandwidth memory as cover to curtail output of older DDR3 and DDR4 chips, the kind that still run most PCs and phones. The complaint puts the price increase on conventional DRAM at roughly 700 percent over four years and cites Apple's recent iPad and Mac price increases as downstream evidence.

Why this probably doesn't end differently

This isn't the first time. A 2018 case made nearly the same argument against the same three companies during an earlier price spike. A district court dismissed it in 2020, and the Ninth Circuit affirmed in 2022, ruling that matching production cuts were more likely explained by lawful, unchoreographed free-market behavior than an actual agreement. Under the Supreme Court's 2007 Twombly standard, a price-fixing complaint has to make an agreement plausible, not just possible, and parallel conduct alone has never cleared that bar. The new complaint adds detail the old one didn't have: Micron's decision to shut down its consumer-facing memory brand, Crucial, and remove a retail supply channel, plus customer-vetting rules the plaintiffs read as joint rationing.

Each of those facts has a non-conspiratorial explanation too. The 2022 production cuts the complaint cites came during the worst memory downturn in a decade, when SK Hynix and Micron were both posting operating losses, and Samsung held out on cuts for months longer than its rivals, which cuts against a lockstep story. High-bandwidth memory carries far better margins than commodity DRAM, giving each company its own reason to chase Nvidia's order book without coordinating with the other two. Micron, Samsung and SK Hynix have all said they made those decisions independently. A hearing on their motion to dismiss is scheduled for October 21 in San Jose.

What it costs you right now

The price pressure is already showing up at checkout, lawsuit or no lawsuit. Microsoft raised Xbox console prices by $100 to $150 this summer. Valve confirmed its Steam Machine will sell for more than $1,000, saying its original goal for the price of the Steam Machine is no longer viable. Sony's PS5 Pro already costs $900, and Video Games Chronicle reported analysts are split on whether the PS6 clears $1,000 at launch. None of that proves a cartel. It proves that whatever is driving memory prices, lawful supply discipline or something a court might eventually call illegal, the bill is landing on the same shelf either way.

Micron's investors do not need to know which explanation is correct to keep buying the stock; record margins work under both. Shoppers pricing out a new laptop or console do not get that luxury, and they will not get a verdict before they need to replace one. The October 21 hearing will decide only whether the case survives long enough to find out.