Micron Technology (NASDAQ: MU) is trading near $878 per share, pricing in an earnings collapse that supply timelines suggest may not arrive on schedule.
The stock sits at roughly 20 times trailing earnings but only about 6 times what analysts expect over the coming year, reflecting deep market skepticism about how long this boom lasts.
That skepticism is rooted in memory’s historic pattern, where high prices reliably attract new supply, and new supply reliably ends the cycle.
Last week, that supply got both a price tag and a construction timeline, and neither points to a near-term threat.
SK Hynix committed approximately $38 billion, or 54 trillion won, to two new fabrication plants, with the first clean room not opening until December 2028.
The larger allocation of 35.2 trillion won funds a DRAM plant called Y2 in Yongin, South Korea, while 19.1 trillion won goes to a NAND plant called M17 in Cheongju.
M17 breaks ground in February 2027 and opens its first clean room in December 2028, while Y2 does not break ground until July 2027, with its first clean room opening in June 2029.
Crucially, a first clean room marks the beginning of equipping a fab, not the start of volume production, pushing meaningful new supply well into 2029 at the earliest.
Meanwhile, the earnings the market is discounting are already arriving at a remarkable pace, with Micron posting fiscal third-quarter revenue that more than quadrupled year over year to $41.5 billion.
That compares to revenue of $23.9 billion just one quarter earlier, with gross margin running at 84.6% versus 37.7% a year ago.
Operating cash flow more than quintupled year over year to $25.4 billion, driven overwhelmingly by data center demand that exceeded $25 billion in the quarter alone.
Management has guided for fiscal fourth-quarter revenue of approximately $50 billion, gross margin of about 86%, and earnings per share of roughly $30.73.
Annualizing that single guided quarter puts the stock at approximately 7 times earnings, a valuation that implies imminent decline in a business still accelerating.
Micron itself stated in its June earnings remarks that industry demand for DRAM and NAND “continues to significantly exceed industry supply,” and expects tight conditions to persist beyond calendar 2027.
To manage the eventual cycle turn, Micron has signed 16 strategic take-or-pay customer agreements, locking buyers into specific volume commitments through the end of calendar 2030.
Those contracts cover roughly 20% of Micron’s DRAM volume and about one third of its NAND volume, with management expecting half or more of total revenue to eventually fall under such agreements.
The largest agreements carry price ceilings set at second-quarter 2026 market prices, alongside price floors that hold through the full term, providing a revenue floor during any downturn.
CEO Sanjay Mehrotra said in the June earnings release that these agreements “will significantly enhance the durability and predictability of Micron’s strong financial performance.”
The primary risk to this outlook is not the construction calendar but rather a cooling of AI-driven demand, which could push memory prices lower without a single new fab coming online.
Based on publicly committed construction schedules, however, the major additions to industry supply arrive in 2028 and 2029, well after Micron’s contracted revenue protections extend through 2030.
