General Purpose DRAM Could Remain More Profitable Than HBM for Micron Through 2027

Micron’s general purpose DRAM business could remain more profitable than its HBM operations even as demand for AI memory continues to rise.

New estimates suggest that Micron’s gross margin on conventional DRAM could reach 95% in 2027, compared with an estimated 75% to 78% for HBM during the same period.

The difference highlights a difficult tradeoff for memory manufacturers. HBM is essential for AI accelerators and data centers, but producing it requires more DRAM capacity, more complex packaging and tighter yields.

DRAM margins are rising faster than HBM

Metric	Estimate
General purpose DRAM gross margin in 2025	44% to 50%
General purpose DRAM gross margin in early 2026	Around 80%
General purpose DRAM gross margin in 2027	Around 95%
General purpose DRAM gross margin in much of 2028	Around 93%
HBM gross margin in 2027	Around 75% to 78%
Micron HBM shipments in early 2025	Around 0.1 exabytes per quarter
Micron HBM shipments by late 2027	Around 0.43 exabytes per quarter

The estimates suggest that the strongest near term profitability may still come from conventional DRAM rather than HBM.

That is notable because HBM has become one of the most important components in AI systems, where GPUs require large amounts of memory bandwidth and capacity.

HBM production consumes more DRAM capacity

HBM is more complicated to manufacture than standard DRAM.

Several DRAM dies have to be stacked vertically and connected through advanced packaging. This increases manufacturing complexity and creates additional yield challenges.

HBM also consumes more DRAM output for the same wafer input.

As manufacturers allocate more capacity toward HBM, less conventional DRAM is available for PCs, servers, smartphones and other products.

That reduction in supply can push general purpose DRAM prices higher, which in turn can increase margins for memory manufacturers.

This creates an unusual situation where expanding HBM production may indirectly make conventional DRAM more profitable.

AI demand still makes HBM strategically important

Despite the lower estimated margins, Micron is unlikely to reduce its HBM ambitions.

The AI accelerator market is expanding quickly, and HBM remains critical for companies building high performance systems for training and inference.

Micron’s quarterly HBM shipments are projected to rise from about 0.1 exabytes in early 2025 to approximately 0.43 exabytes by late 2027.

That growth shows how aggressively the company is expanding its HBM business even if conventional DRAM currently offers stronger margins.

Samsung and SK hynix are following the same direction, with all three suppliers investing heavily in next generation HBM products such as HBM4.

Current DRAM profitability may not last forever

The exceptionally high margins expected for conventional DRAM are unlikely to remain permanent.

Memory pricing tends to move in cycles, and current supply shortages have given manufacturers unusually strong pricing power.

A separate estimate suggests memory producers currently hold around $38 billion in advance payments, giving them significant leverage over customers.

That balance may begin to change around 2029 as more production capacity comes online and buyers regain negotiating power.

Micron therefore has an incentive to benefit from strong DRAM margins now while continuing to build HBM capacity for longer term AI demand.

For the next few years, the company may earn more from conventional DRAM on a percentage basis, but HBM remains strategically important because it positions Micron for continued growth in AI infrastructure.