"AI is turning memory from a cyclical commodity into an infrastructure bottleneck. Gavin Baker has repeatedly stated publicly that DRAM/HBM is currently the most critical constraint, predicting that memory could account for 30%-40% or even higher of hyperscale cloud providers' capital expenditures. Estimates from institutions like SemiAnalysis, CLSA, and TrendForce also point to a rapid increase in memory's share of hyperscale capital expenditures by 2026, with some forecasts suggesting it could approach or exceed 50% by 2027. AI data centers are expected to consume about 70% of global memory output. The supply side aligns with the description of "exponential demand versus linear supply." Only three companies (SK Hynix, Samsung, Micron) are capable of producing advanced HBM, and HBM capacity for 2026 is essentially sold out, with shortages expected to persist into 2027 or even later. It typically takes years for new factories to ramp up production, and large-scale expansions by companies like Micron won't yield effective increases until around 2028. This explains why DRAM prices have surged, consumer electronics are being forced to raise prices, and why Micron's recent earnings report showed significant year-over-year revenue growth, gross margins exceeding 80%, and the signing of a long-term agreement worth around $100 billion. Elon Musk's Terafab reinforces the same logic: he publicly stated that memory is the biggest constraint, with demand growth far outpacing supply growth. As a result, he chose to build an integrated factory that includes memory production rather than relying on the existing industry to keep up indefinitely. This is more of a confirmation of the shortage rather than an immediate shift in Micron's position as a commercial supplier. It's worth noting that the memory industry has historically never truly escaped its cyclical nature. New capacity is being added, and once supply catches up after 2028, prices and profits could still decline; the market's valuation of Micron still reflects a "cycle peak eventually" discount. In short, the next big battle isn't just about GPUs—it's about memory. #AI #DRAM #HBM #Micron #ElonMusk #Terafab #TechNews #Semiconductors #CloudComputing #DataCenters