NuAxiSemiconductor trade intelligence

Elon Musk calls out memory makers over 'extortionate' chip pricing, says Micron is playing smart for long-term loyalty

What happened

Elon Musk posted on X criticizing memory makers for what he calls 'extortionate' pricing amid an unprecedented shortage of both conventional DRAM and high-bandwidth memory (HBM), while praising Micron as 'reasonable' regarding future memory prices and saying it is 'making the smart move for long-term customer loyalty.' The article notes that Musk did not identify the companies he criticized and provided no specific details of the pricing or the terms offered by different suppliers (which tend to be confidential), so it is impossible to determine whether Samsung Electronics and SK hynix charge substantially more than Micron for comparable products; his remarks are nonetheless seen as directed at the South Korean memory manufacturers. The article adds that Micron's own profitability is exceptionally high: in its fourth quarter of fiscal 2026, Micron reported revenue of $54.23 billion and a GAAP gross margin of 81%, up from 40% a year earlier; its cloud memory unit earned $16.283 billion with an 83% non-GAAP gross margin; its core data center storage business sold $18.002 billion worth of goods with a 90% gross margin; automotive and embedded unit sales totaled $6.824 billion with gross margins reaching 84%; and mobile and client revenue was $13.114 billion with a 90% non-GAAP gross margin. Micron has signed 26 strategic customer agreements covering more than 35% of its expected revenue through 2030, with $32 billion in customer financial commitments, most consisting of cash deposits, and the company acknowledges its new agreements reflect higher prevailing memory prices and is by no means selling memory at a discount. Separately, Samsung has reportedly secured long-term contracts covering 75%–80% of its planned memory output in 2027, and SK hynix is reportedly pursuing similar arrangements. Market insiders and analysts expect memory supply shortages to persist through at least 2028. The article also states that manufacturers have raised memory prices severalfold this time without comparable increases in production capacity, and supply still lags behind demand.