Elon Musk Slams Memory Makers Over Extortionate Pricing, Praises Micron's Strategy

Musk Targets Memory Pricing Amid DRAM and HBM Shortage

Elon Musk has criticized memory makers for what he calls "extortionate" pricing amid an unprecedented shortage of both conventional DRAM and high-bandwidth memory (HBM). Although Musk did not identify the companies he criticized, his remarks appear directed at Samsung Electronics and SK hynix, as he praised Micron for its more reasonable approach at the same time.

"Micron has been reasonable regarding future memory prices, while others have been extortionate, which is something today's customers will not forget," Musk wrote in a post on X. "Micron is making the smart move for long-term customer loyalty."

Micron's Margins Tell a Different Story

Micron's financial results suggest the company is also capitalizing on tight supply. 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 mobile and client business posted a 90% non-GAAP gross margin on $13.114 billion in sales, meaning Micron earned higher profits on consumer memory than on data center products. The data center storage unit sold $18.002 billion in goods with a 90% gross margin, while the automotive and embedded unit generated $6.824 billion with 84% gross margins.

Supply Constraints Drive Long-Term Deals

Memory manufacturers have raised prices severalfold without comparable increases in production capacity, leaving supply behind demand for years to come. Suppliers are shifting toward long-term supply agreements that guarantee future volumes and predictable prices for DRAM, HBM, and NAND. Micron has signed 26 strategic customer agreements covering more than 35% of its expected revenue through 2030, including $32 billion in customer financial commitments, mostly in cash deposits.

Samsung has reportedly secured contracts covering 75% to 80% of its planned 2027 memory output, according to South Korea's Korea Economic Daily, while SK hynix pursues similar arrangements as AI infrastructure investments absorb available capacity. Market insiders expect shortages to persist through at least 2028, giving suppliers considerable leverage in negotiations. Musk's warning suggests that today's pricing policies could shape customer relationships once supply and demand eventually return to balance.

Sources: Tom's Hardware