(SeaPRwire) – By: Reginald Vance
The memory chip shortage is not a supply problem. It is a capital problem. Building advanced fab capacity takes years and billions in upfront spend. No one can simply flip a switch and flood the market with HBM or DRAM chips. That physical reality is why Micron — up nearly 700% in a single year — is still trading at just six times forward earnings. The market refuses to price in a future it cannot see past late 2027.
Micron closed at $1,016.59 on Friday after gaining 6.1%. It reclaimed the $1,000 mark for the first time since August 17. Across the Pacific, SK Hynix rose 8.3% and Samsung gained 5.7% in South Korean trading. The sector is moving in unison. Wall Street expects revenue to hit $50.41 billion for fiscal Q4, compared with $11.32 billion a year ago. Adjusted EPS is forecast at $30.89 versus $2.84 last year. Management has said the supply crunch will not ease until after 2027. New production facilities will not be ready any sooner. That timeline creates a pricing window that the market treats as a temporary anomaly rather than a structural advantage.
The gap between earnings velocity and valuation multiples tells the real story. Six times forward earnings is absurd for a company guiding for a fourfold revenue increase. But the discount exists because demand could shift. The question is whether new supply arriving in late 2027 and into 2028 will simply match AI hyperscaler consumption or overwhelm it. Barron’s has argued Micron could double from levels around $1,100. The stock trades below that threshold. When September 30 earnings arrive, the market will decide whether the current price still discounts the risk or finally reflects it.
Author bio: Reginald Vance is a venture partner specializing in semiconductor valuation and advanced materials, with a focus on capital allocation cycles in the memory chip industry.