Micron Technology executives sent a clear signal at a recent investor conference: even if new wafer fabrication plants commence production in 2027, the tight supply-demand situation for DRAM and HBM will remain difficult to resolve. According to information, Micron's CFO Mark Murphy and Chief Business Officer Sumit Sadana reiterated at a recent investor conference organized by JPMorgan Chase that the company currently meets only 50% to two-thirds of its key customers' medium-term demand. Even with the newly built Idaho 1 fab anticipated to start mass production a quarter earlier, by mid-2027, the capacity ramp-up will be gradual, while demand continues its relentless climb. This persistent supply-demand imbalance is poised to provide sustained support for memory chip prices. JPMorgan Chase forecasts that the average price of DRAM will surge by nearly 60% year-on-year in 2026. Micron's management indicated that new capacity from competitors is not expected to come online until late 2027 and 2028, and these projects will face similar physical constraints during their own ramp-up phases. JPMorgan Chase believes the supply tightness will extend beyond 2026, underpinning further price strength. The supply gap is proving difficult to close, with new capacity ramping up slowly. Micron management revealed at the conference that they have accelerated the first wafer output timeline for the Idaho 1 fab by approximately one quarter to mid-2027. However, they emphasized that the production ramp-up for this new facility will be incremental, constrained not by capital limitations but by physical factors. Competitors' new capacity projects face analogous challenges. JPMorgan Chase notes that other manufacturers' new fabs are scheduled to start production only in late 2027 and 2028, and their ramp-up speeds will also be limited. Concurrently, demand for memory continues to grow "up and to the right." Micron is currently constrained in meeting incremental customer demand due to a lack of available cleanroom space. Nevertheless, through process node transitions, production efficiency improvements, and accelerated yield ramps, the company anticipates its DRAM and NAND bit shipments will increase by at least 20% in 2026. Yet, this growth rate still lags behind demand growth—JPMorgan Chase projects demand growth will exceed 30%. AI application demand is exploding across the board, with GPU and XPU orders being continuously revised upwards. Micron management expressed a highly optimistic view on the demand environment for both DRAM and NAND, noting that customers are persistently increasing their memory and storage requirements. This trend has been evident in the GPU and XPU markets over recent months. Nvidia's previously announced backlog for its Rubin and Blackwell products exceeds $500 billion (covering through the end of 2026), and the company has indicated that orders continue to grow. Broadcom's TPU shipments are also on the rise. JPMorgan Chase earlier this week raised its CoWoS capacity forecast, partly due to increased expectations for TPU shipments. Micron management pointed out that even with new cleanroom capacity expected to come online starting in 2027, demand is likely to continue outstripping supply. JPMorgan Chase anticipates this ongoing supply-demand tension will continue to support strong pricing at least through 2026, with the firm forecasting a nearly 60% year-on-year increase in the average DRAM price for that year. Context window storage is emerging as a new growth driver for NAND. Micron management stated that Nvidia's announcement this week at CES of a new inference context window storage platform was not surprising. Other players, including hyperscale cloud providers with internal AI XPU infrastructure, have already deployed or are developing KV cache management systems to handle rapidly growing context window sizes and the need to offload data from HBM and system memory. Management believes this will open another avenue for NAND bit demand growth, as the attach rate for Nvidia's systems based on BlueField-4 is expected to be high. Importantly, Micron expects that KV cache offloading efforts will not impact customers' HBM roadmaps for the coming years, which are already firmly established. Embodied AI and robotics are poised to become a "massive" demand driver. Echoing sentiments expressed by companies like Nvidia and AMD at CES, Micron anticipates that embodied AI, particularly robotics, will become a "massive" driver of memory demand, following generative AI, and could account for a significant portion of overall industry demand in the future. Management described customers' plans as "incredible" in terms of scale and the implied memory requirements. For instance, a leading humanoid robot utilizes as much as 64-128GB of DRAM and 1-2TB of NAND (and these figures are likely to increase further). When considered on a scale of millions of units, this translates to substantial incremental demand for both DRAM and NAND. JPMorgan Chase maintains an "Overweight" rating on Micron with a $350 price target, based on $40 of earnings power in 2026 and a price-to-earnings multiple of 8-12 times, which is consistent with the multiples for memory stocks in the late cycle.