Micron made massive amounts of money - again - in its third fiscal 2026 quarter, $1.46 billion, more than its entire previous fiscal year’s $37.38 billion, as it profited from the AI memory and NAND boom.
The company is the third member, alongside Samsung and SK Hynix, of a DRAM manufacturing triopoly. Its revenues were up 346 percent Y/Y with a $28.24 billion of GAAP net income, a 1,398 percent increase from the year-ago $1.89 billion. The increase was so great that it amounted to more than the previous quarter’s entire $23.9 billion revenues. DRAM revenues of $31.3 billion were up 340.8 percent while NAND revenues rose 360 percent to $9.9 billion. Micron does not split out its HBM revenues from its DRAM revenues.
Sanjay Mehrotra, Micron’s Chairman, President and CEO, said: “Micron’s record fiscal Q3 financial results and even stronger outlook for Q4 reflect the strategic value of memory in the AI era. Micron is investing at record levels in technology, products and supply to address our customers’ rapidly growing demand. We believe our multi-year Strategic Customer Agreements will significantly enhance the durability and predictability of Micron’s strong financial performance.”
Financial summary
Gross margin: 84.6% vs 37.77% last year,
Operating cash flow: $25.4 billion vs $11.9 billion for the prior quarter,
Free cash flow: $18.3 billion vs prior quarter’s $6.9 billion,
Diluted EPS: $24.67 vs year-ago $1.68, Cash, marketable investments, and restricted cash: $30.2 billion.
It has four business units and their revenues and rises were;
Cloud: $13.8 billion, up 307%
Core Data Center: $11.5 billion, up 653%
Mobile & Client: $11.5 billion, up 254%
Automotive & Embedded: $4.6 billion, up 311%
The rise of AI and its need for memory and NAND means AI system performance is architecturally dependent on memory subsystem performance and capacity. Memory has become, Micron says, a strategic asset for AI.
Micron raised its prices substantially in the quarter, with DRAM average system prices (ASPs) lifted in the low-60s percentage range Q/Q and NAND ASPS going up in the mid-80s percentage range.
Increasing DRAM and NAND supply is taking a long time and both DRAM and NAND bit supply growth is limited.
In DRAM, It said, technology transitions are driving slower bit growth over time, wafer growth needs are significantly increasing cleanroom space and greenfield fab requirements, and HBM’s growth and increasing trade ratio with every new generation further pressures non-HBM supply.
In NAND, industry suppliers redirecting cleanroom space from NAND to DRAM and overall limited cleanroom space constrain NAND bit supply growth.
Mehrtora said: “Memory industry supply growth is dependent on significant greenfield fab expansions. These greenfield projects are large, complex and time consuming. ” The company is increasing its production capacity;
The newly acquired Tongluo site in Taiwan is expected to support meaningful product shipments from the existing 300,000-square-feet fab in mid-calendar 2027, about a quarter earlier than prior expectations.
It has begun construction of a similar-sized second cleanroom at this site to support EUV equipment.
A Singapore packaging site will contribute to HBM packaging capacity beginning in the first half of calendar 2027.
But Micron said “We currently do not have line of sight as to when memory supply will be able to catch up with increasing demand.”
As a result, Micron has signed 16 strategic customer agreements (SCA) for memory supply, representing roughly 20 percent of its DRAM volume and a third of its NAND volume over this period. They provide committed DRAM, including HBM as appropriate, and NAND supply over the SCA period.
It sees these SCAs fundamentally transforming its business model; “When completed, we expect approximately half or more of our company revenue to be under these SCAs with customers across end markets.” Projections see it receiving cash deposits and related financial commitments of $22 billion.
They cover the datacenter and consumer markets (5-year duration) and also the automotive sector (3 year duration). They include four very large customers and three medium-sized customers in the data center/consumer area. The other 9 are with automotive customers. The largest agreements generally have a ceiling price for existing products at the current CQ2 (calendar Q2) market price, and a floor price through the term of the agreement.
Mehrotra said: “For our SCAs with price bands, the floor price enables a very robust gross margin for Micron, well above our peak quarterly margins in any past cycle. Fourteen of the 16 SCAs that we have signed have a cumulative revenue at minimum price per our contracts of approximately $100 billion over the remaining agreement term.”
Micron’s level of profitability might seem excessive, and is helped by the DRAM and NAND industry having high, costly, barriers to entry, a finite production, and a huge AI-driven demand surge. These points elevate the pricing power of the DRAM/NAND fabbing trio; Samsung, SK Hynix and Micron.
Mehrotra said: ”The memory industry has been structurally transformed by the proliferation of AI. We are only in the early innings of the significant innovation and productivity that can be unleashed in every part of the global economy over time. Data center-driven growth will be increasingly complemented by AI-enabled features in smartphones, high-end PCs and new consumer devices, as well as in automotive, industrial applications and robotics. Exciting possibilities enabled by robotics and humanoids, as well as fully autonomous vehicles, portend a robust long-term demand environment for memory and storage.”
Looking ahead, in NAND, Micron sees AI context memory storage and HDD displacement opportunities are expanding the addressable market for SSDs. In the automotive and robotics area it notes that ADAS (advanced driver-assistance systems) remains a powerful driver of content growth. Humanoid robots carry 10 times the amount of memory as an average L2+ vehicle, and it expects a sustained, substantial multi-decade memory demand cycle to begin in the latter part of this decade.
The final quarter’s outlook is for revenues of $50 billion ± $1.0 billion, a 341.7 percent Y/Y increase at the mid-point. Full fy2026 revenues would be $128.96 billion, a 245 percent uplift on fy2026.
We expect Samsung and SK Hynix to report similarly fabulous results, with Kioxia and Sandisk profiting on the NAND side. China's CXMT is also likely to emerge as a significant memory industry player.