마이크론(MU) 2026 회계연도 4분기 실적 발표 컨퍼런스 콜: 2028년까지 메모리 공급 타이트

핵심 요약

• 마이크론은 2027 회계연도 출하량의 75% 이상이 확정 계약되어 고객사 배정 논의가 2028년으로 이동할 수 있게 되었다고 밝혔다.
• 경영진은 AI 수요, 클린룸 제약, 공정 전환 효과 둔화, HBM의 높은 웨이퍼 소모율(trade ratio) 등에 힘입어 메모리 수급 여건이 2028년까지 타이트하게 유지될 것으로 예상하고 있다.
• 마이크론은 이번 분기 동안 10개의 새로운 전략적 고객 협약(SCA)을 체결하여 DRAM 및 NAND 전반에 걸쳐 총 26개의 협약을 확보했다.
• 2027년 연간 HBM 가격은 크게 상승했으며 연초에 재설정될 예정으로, 범용 DRAM과의 수익성 격차를 줄이는 데 기여할 것으로 보인다.
• 경영진은 가격 상승과 우호적인 제품 믹스에 힘입어 2027 회계연도 1분기 이후 잔여 기간 동안 마진이 확대될 것으로 예상하며, 이는 초기 가동 비용에 의해 일부 상쇄될 전망이다.
• 2027 회계연도 건설 설비투자(CAPEX) 증가분의 대부분은 2028년 연말 이후 클린룸 확보 시점을 앞당기는 데 투입될 예정이다.

주요 재무 데이터

사업 및 운영 실적

HBM은 마이크론 AI 전략의 핵심으로 남아 있다. 경영진은 2028년까지 HBM 출하량이 범용 DRAM보다 빠르게 성장하여 전체 산업 생산능력에서 HBM이 차지하는 비중이 높아질 것으로 예상한다. 마이크론은 특정 점유율을 고정 목표로 삼지는 않지만, HBM 시장 점유율이 전체 DRAM 점유율과 유사한 수준을 유지할 것으로 기대하고 있다.

마이크론은 맞춤형 HBM4E 제품인 NV HBM에 대해 엔비디아(NVIDIA)와 1년 이상 협력해 왔다. 공동 설계된 이 제품에는 파운드리 공정이 적용될 예정이다. 경영진은 전력 효율성, 속도, 영업이익률, 제품 품질을 중심으로 차별화가 이루어질 것으로 보고 있다.

모바일 부문에서는 비트 출하량이 전분기 대비 감소했으나, 가격 상승과 우호적인 제품 믹스 덕분에 매출은 증가했다. 마이크론은 출하량이 감소하는 상황에서도 프리미엄 PC와 플래그십 스마트폰에서 고용량 메모리 탑재와 고성능 솔루션 요구가 지속되고 있다고 설명했다.

마이크론은 1감마(1-gamma) DRAM 기술이 이미 자사 비트 생산의 대부분을 차지하고 있으며, 회사 역사상 가장 큰 공정 노드가 될 것으로 전망된다고 밝혔다. 차세대 1델타(1-delta) 공정은 개발 중이며, 내년 하반기 양산을 목표로 하고 있다. 경영진은 마이크론이 중국 경쟁사들보다 기술 노드 면에서 최소 2단계 이상 앞서 있다고 언급했다.

NAND의 경우, 경영진은 전체 시장 상황이 타이트하게 유지되는 가운데 2027년 및 2028년 업계 비트 출하량이 20%대 중반 수준으로 성장할 것으로 예상하고 있다. 마이크론의 9세대(Gen 9) 양산 확대로 비용 효율적인 공급이 가능해질 전망이며, 싱가포르의 신규 클린룸은 2028년 하반기에 가동될 예정이다.

경영진 가이던스

경영진은 2027 회계연도 1분기 이후 남은 회계연도 기간 동안 마진이 확대될 것으로 예상하고 있다. 주된 요인은 상승 속도는 다소 완만해지더라도 지속적인 가격 상승세가 유지된다는 점과 마이크론의 기술 및 제품 포지셔닝에 기반한 제품 믹스 개선이다. 초기 가동 비용은 이를 일부 상쇄할 것으로 보인다.

2027 회계연도 1분기에 대한 마이크론의 가이던스는 DRAM과 NAND 모두 전분기 대비 한 자릿수 비트 성장을 전제로 한다.

2027년 연간 HBM 가격은 크게 인상되었으며 연초에 재설정될 예정이다. 경영진은 이를 통해 HBM과 범용 DRAM 간의 수익성 격차가 줄어들 것이라고 밝혔다.

성과 보상 효과를 제외하고, 마이크론이 개발 활동을 확대함에 따라 2027 회계연도 R&D 지출은 전년 대비 10억 달러 이상 증가할 것으로 예상된다.

리스크 및 주요 점검 사항

클린룸 용량은 여전히 업계 공급의 주요 제약 요인으로 작용하고 있다. 신규 시설이 웨이퍼 생산을 시작한 후에도 의미 있는 출하가 이루어지기까지는 수 분기가 더 걸릴 것이라고 경영진은 설명했다.

전체 생산량에서 HBM의 비중이 늘어나는 것 역시 범용 DRAM 공급을 제한한다. HBM3E에서 HBM4 및 향후 HBM4E로의 전환은 더 높은 웨이퍼 소모율을 요구하는 반면, 최신 공정 노드가 제공하는 비트 성장 효과는 점점 줄어들고 있다.

마이크론은 해당 클린룸에서 생산이 시작되기 전에 건설 지출을 늘리고 있다. 회사는 수요가 구체화됨에 따라 장비를 도입하고 생산능력을 늘릴 계획이며, 고객의 요구사항과 잠재적 자본 수익률을 평가하기 위해 SCA를 활용할 예정이다.

프리미엄 기기의 메모리 탑재량 증가, 제품 믹스 및 가격 상승에 힘입어 매출은 뒷받침되고 있지만, 모바일 및 클라이언트 제품의 출하량은 여전히 압박을 받고 있다.

애널리스트 Q&A 하이라이트

2028년까지의 수급 균형: 경영진은 강한 AI 수요, CPU 기반의 에이전틱(agentic) 워크로드, 그리고 제한된 공급으로 인해 시장이 언제 균형을 되찾을지에 대한 가시성이 낮아졌다고 밝혔다. 2027 회계연도 출하량의 75% 이상이 이미 확정된 상태다.

장기 고객 협약: 최신 SCA는 다양한 가격 책정 구조를 유지하고 있다. 명확히 정의된 프레임워크의 대부분은 하한선 및 상한선 밴드(floor-and-ceiling bands)를 적용하며, 신규 협약은 상승한 현행 가격과 지속적인 시장 타이트함에 대한 전망을 반영하고 있다.

가속기 이외의 AI 수요: 마이크론은 CPU에서 실행되는 에이전틱 AI 워크로드가 DDR 메모리, 저전력 메모리, SSD에 대한 수요를 늘리고 있다고 전했다. 경영진은 DRAM 가용성을 데이터센터 연산 인프라 구축의 핵심 제약 요인으로 보고 있다.

설비투자(CAPEX): 2027 회계연도 건설 지출 증가분의 대부분은 2028년 연말 이후 클린룸 확보 시점을 앞당기기 위한 것이다. 마이크론의 아이다호 시설은 2027년 중반에 첫 웨이퍼를 생산할 것으로 예상되지만, 의미 있는 공급까지는 몇 분기가 더 걸릴 전망이다.

잠재 수요 가능성: 경영진은 고객들이 확보 가능한 메모리를 기반으로 연산장치 출하를 극대화하고 있다고 밝혔다. 메모리 공급이 추가로 이루어진다면 가속기 및 CPU 기반 AI 워크로드 전체에서 시스템당 탑재량을 더 늘릴 수 있을 것이다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Hello, everyone. Thank you for joining us, and welcome to Micron's Fourth Quarter Post-Earnings Analyst Call. After today's prepared remarks, we will host a question-and-answer session. [Operator Instructions] I will now hand the conference over to Satya Kumar, Corporate Vice President, Investor Relations and Treasury. Satya, please go ahead.

Satya Kumar

Thank you, and welcome to Micron Technologies Fiscal Fourth Quarter 2026 Post Earnings Analyst Call. On the call with me today are Manish Bhatia, President and Chief Operating Officer; Dr. Scott DeBoer, President and Chief Technology and Product Officer; and Mark Murphy, our Chief Financial Officer.

As a reminder, the matters we're discussing today include forward-looking statements regarding market demand and supply market trends and drivers and our expected results and guidance and other matters. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today. We refer to the documents that we filed with including our most recent Form 10-K and upcoming 10-Q for a discussion of risks that may affect our results.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements to confirm these statements to actual results. We can now open up the call for Q&A.

Operator

We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Ben Reitzes from Melius.

질의응답

Benjamin Reitzes

Congrats on the promotion, Scott, I'm not sure if Manish is on, but congrats. So I wanted to ask about Congrats. So wanted to talk about 2028, new commentary here regarding and you guys felt compelled to kind of say you see things tighter in '28 than this year as well as '27. I wanted to know a little bit more about what changed and what that means for margins. You gave more margin commentary than you usually do around '27, which was great, by the way. but I just don't see any reason why margins would change in '28 from the level you implied for '27. So just a little more comment around '28 would be great.

Manish Bhatia

Sure, Ben. I can start, and then if Mark wants to add anything, and thank you for the shout out. In -- in terms of 2027 and 2028 in our commentary, we are seeing stronger demand drivers than we've seen before. We commented about the server units continuing to grow into '27. And of course, I think everybody is talking about how agentic AI is really growing fast, and that's creating a CPU-driven demand stream as well. And so as we've gone through working on our fiscal year '27 and we commented that we have more than 75% of our shipments committed for the year that shows a strengthening demand and allows us to shift our conversations on allocation with our customers out to 2028.

And so that's one element of our confidence is that '27 is shaping up with stronger demand than maybe we had seen before. And then, of course, as we also have now more SCA conversations with customers, including extensions that we've now negotiated that gives us more confidence in the long term as well. And so the combination of those two things is a very strong outlook for demand through 2028.

And then on the supply side, there's still the same structural constraints on supply growth that we've talked about before, which is diminishing returns from technology transitions versus past technology transitions. HBM growing faster than conventional DRAM through 2028, which means that as a portion of the industry's output capability, HBM is growing in terms of that share. And of course, the trade ratio, not just today's trade ratio for HBM, but future more complex HBM having higher trade ratios that's also going to be constraining supply.

And then it just takes a long time for these new clean rooms that the whole industry is working on to be able to build and then qualify and then equip and it takes -- even from the time they open, it takes a few quarters for meaningful shipments to come. So that really gave us the combination of that demand outlook and this supply outlook. We made the statement that we really don't have line of sight to when supply and demand balances.

Mark Murphy

Yes, Ben, I would maybe just add to Manish's comments that as you noted in '27, we had indicated for the balance of the year that we would see margin expansion relative to Q1 a function of continued price increases, albeit at a more moderate pace. And we've said that for some time that eventually price increases would moderate. And then at that point, in addition to just price increases at a lower rate, we would -- we have a better mix of products, and we would work our mix based on our technology and product leadership.

And the market conditions, as we said, we would expect to remain tight, and that would be supportive through '28. And of course, the partial offset to price and favorable mix would be start-up costs. But these are all things we're managing. We've been managing them, and we would expect to be able to sustain strong financial performance.

Benjamin Reitzes

Great. And if I could just sneak one other in. I mean, Sanjay had a great seat at the Trump, I guess, launch dinner, whatever, lunch. And just wondering, did you come away feeling good about the industry's ability to grow and self-regulate and the future coming out of that meeting, did that lend a hand any of the upbeat guidance he gave? Or just any color out of that and how we felt coming out and even if memory came up a lot at the meetings.

Manish Bhatia

Well, Ben, Sanjay is not here, but I'll give you what conversations I mean, for sure, we're very happy to participate in that forum. And it does show the importance of memory that Micron was invited there along with the model companies as well as the accelerator companies. I think that the framework that in the white paper or the -- that was published out of that, that many of the model companies have already signed is that, that framework is constructive towards continuing to have advancement in AI infrastructure and AI, in particular, AI hardware infrastructure.

And I know that one of the concepts that got discussed quite a bit was that the way to manage some of the security aspects is to actually have security solutions, which will require more advanced hardware, including higher performance memory, lower latency memory, as part of those security solutions, higher bandwidth memory because if you can imagine, setting up a gateway to be able to manage much of the security aspects that could be proposed in the future, those -- the responsiveness of those gateways are going to depend a lot on the availability of performance and low latency members.

Operator

Your next question comes from the line of Melissa Weathers from Deutsche Bank.

Melissa Weathers

My congrats as well to the 2 new promotes. On the -- and -- in past quarters, you've given us a view on where you think the HBM total TAM could be by 2028, 2030. Clearly, the pricing environment has changed since those updates. I don't know if you want to give us an official new number for where you think HBM TAM could go. But like directionally, can you help us sort of try to size like how much is coming from bets and how much is coming from pricing? And just any updated views on how big you think that market could be?

Manish Bhatia

Sure, Melissa, thank you again. We are not updating that TAM outlook right now. But what we have said is that HBM shipments, we expect to grow faster than conventional DRAM. That means that HBM will continue to gain -- to grow as a portion of the industry's capacity year through 2028. And the pricing for HBM, at least for us, we did comment that we have increased that pricing significantly for calendar year '27, which will reset at the beginning of the calendar year to narrow the profitability gap with conventional DRAM. But beyond that, we haven't made any comments on the specific outlook for the HBM TAM. It continues to grow, it continues to be a very important enabler. HBM deployments continue to be an important enabler of much of the rest of the to be able to reach its potential as well. So it's an important part of the market.

Melissa Weathers

Got it. Maybe following up on that, from a market share perspective, any updated view on how you guys are targeting market share for HBM. In the past, you said you want to get it to within the corporate average, kind of low 20s present market share. So is that still the case? And then I noticed in the prepared remarks, your comments on HBM 4E and the engagements with NVIDIA there. So just any more color on 2027 and HBM 4E the progress that you're making there with customers would be great. .

Manish Bhatia

Sure. Sure. I'll take the first and then maybe Scott can take the HBM 4E since his team is driving that product development. In terms of the HBM market share, about a year ago, we had achieved the milestone that we talked about that our HBM market share reached our broader DRAM market share. And at that time, we said that our goals would then move around based on various different factors. And we haven't really updated exactly our HBM share target other than to say that we do expect our HBM share to be around our broader DRAM market share, but we're not necessarily targeting 1 number or the other. It will move around based on various different factors there. But as I mentioned on the prior question, it's a really important part of the market. It allows us to be very close to the leading edge of the accelerator platforms that many of our customers are designing and then deploying, and it's a key enabler for all the rest of AI to be able to deliver on its promise and its potential.

Scott DeBoer

And then I can just add a little bit about the work with NVIDIA on what really will be the first major custom HBM product out in the market. And we've been working with NVIDIA for over a year on HBM 4E, what's called NV HBM. And we see substantial opportunity there for us in the co-design of that product with obviously a key customer to have this be a product that delivers really substantial value beyond standard HBM 4E. And I think it will be a real impact on industry showing where future system with optimized.

Operator

Your next question comes from the line of Atif Malik from Citi.

Atif Malik

The first one on the 26 35% of sales by 2030. Are these for both DRAM and NAND? And if you can just split them out?

Manish Bhatia

It, we're not splitting those out, but the SCA agreements do cover both DRAM and NAND. And it is through 2030, but we're not breaking it out specifically. I can tell you that the DRAM volume is a little bit less than that, approximately 35% and the NAND bit volume is a little bit more. And as we think about these going forward, we are -- we have more availability. As we said, that this number could get up to be higher in the future as we continue negotiations for SCA.

Atif Malik

Understood. And then on the impact of China competition, firstly, if you can confirm that your China sales exposure is fairly minimum. And if Scott can comment on how should we see kind of China competitors kind of closing the gap on technology? If you can provide any color?

Manish Bhatia

So on the first question, Yes, our exposure to China has been reducing over the last couple of years in the last several quarters, and we expect the exposure will be in the single-digit range in fiscal '27.

Scott DeBoer

Then I could comment a little on the technology side. Currently, our technology leadership is at least 2 nodes ahead of of the China competition. I think it's important to say that our focus is on maintaining technology leadership and having true differentiation in our products in how we compete. We're -- as Manish, I think, mentioned earlier and as it was mentioned in the call, our 1-gamma DRAM technology is already the majority of our bids, and it set up to be the largest node in the company's history. It is dependent on EUV technology. The next-generation One Delta is well underway and we're focused on the ramp of that in the second half of next year. EV technology is critical to all advanced DRAM nodes going forward. And our expertise in that, both from the technology side in partnership with our supplier there as well as mass technology and other things is -- continues to be a key differentiator for Micron.

Atif Malik

And then .

Manish Bhatia

Thank you, -- and can I just clarify that the response in terms of DRAM and NAND was actually a bit common just to make sure that, that was clear. I'm not sure I specified. So making sure it's clear. .

Operator

Your next question comes from the line of Karl Ackerman from BNP Paribas.

Karl Ackerman

Yes. Thank you, Tara. You are seeing robust demand across much of your portfolio, but this quarter does appear to the second quarter row that mobile and client segment saw bit shipments decline. Are higher memory prices reducing demand in this area of the market. And while this area of the market has been slow to adopt SCA, I'm curious if your growth in SCA is coming from this cohort.

Manish Bhatia

Thanks, Karl. We did see sequential bit decline in our mobile business unit, but we did see revenue growth, obviously, with both higher pricing and favorable mix. I think what's important to note is that the premium segments of the both clients as well as the flagship smartphones do see robust demand for higher content, higher performance solutions. And that's a segment that, of course, we're -- those are the segments that, of course, we're very focused on. And with that wind at their back, we see the PC and mobile industry revenue to be growing even though we do see unit volumes declining. And in terms of SCAs, I'll just comment that we do have SCAs across all of our business units, including the Mobile Client business unit. And we're not specifically breaking them out, but I will tell you that we have SCAs because it's important for us to be maintaining diversified supply to all our end markets.

Karl Ackerman

Got it. Yes. Maybe a question for Scott, if I could. How do you view the competitiveness of your in-house optimized base die on HBM 4E versus peers? Certainly, some of these customers are seeing custom solutions. Does the complexity and economic value flow primarily through the compute customers or the HBM providers?

Scott DeBoer

So maybe just a little clarification first. On HBM 4E, we have co-designed with NVIDIA, but not in-house-based like we use on HBM 4. So I think just to be clear on your question, I just wanted to be sure I was answering it in the right way. On HBM 4E, this codesign is on a foundry process, both for the customized product and for the say get specified product.

So the -- and then I think maybe to add a little color to that. The differentiation just as we have demonstrated in the past on HBM prior HBM products winds up being in the power and the ultimate speed performance and the margin of the product working with our customers. That, in all previous generations hasn't been the same between suppliers in that we think will continue to be a strength of Micron in terms of quality of the product and the capabilities that we're able to put out.

Manish Bhatia

And then in terms of your question on economic value, HBM is a premium product. And as Scott mentioned, as we look at the NV HBM with customization, we do expect that to be a high-value product as well. And we're confident that HBM will continue to contribute and be a strong ROI product for us.

Operator

Your next question comes from the line of Jim Schneider from Goldman Sachs.

James Schneider

Congratulations, Manish and Scott. I just wanted to maybe get a sense about -- of the 10 new customer SCAs you signed in the quarter, maybe give us a little bit of color on what customers are asking for? Obviously, they want supply and they want longer-dated supply. But is there any kind of change in the pricing construct either you or they are asking for? Sort of given -- the reason I ask the question is kind of given the expectation about tightness through calendar '27 and '28. Are you maybe a little bit less inclined to call for the fixed ceiling and floor pricing if you think you can capture a little bit more upside over the next couple of years?

Manish Bhatia

Yes, yes. Well, thanks, Jim, and thanks for the shout out. I would say that the framework of the FCAs that we have is similar. But what's different is that the negotiations reflect current market conditions and outlook for market pricing, right? And so the direction of travel has been for higher pricing. And so those are now factored into the discussions that we're having with customers versus the prior ones, which we had talked about that were set at Q2 kind of market conditions. And as I think we gave color that about 3/4 of the SCA have this -- of the SCA revenue has a defined pricing framework in about 1 quarter is open to periodic negotiations or pricing that move with market dynamics.

Of the -- so I guess I would answer that in terms of the overall framework similarity. The majority of the pricing frameworks have floor and ceiling bands, but the newer ones are negotiated with an eye towards the current market conditions and the future market tightness that we see.

James Schneider

Got it. I mean just to be clear, does that mean all the pricing ceilings and floors just reset to the higher bucket conditions you're seeing today? Or is the nature of the pricing condition is actually different, too? And then maybe just to ask, just curious as to whether -- I don't think you've disclosed signing initial hyperscale customers. I'm wondering if those are included in the TAM.

Manish Bhatia

Yes. So I mean there are multiple different frameworks. What I commented on is that the majority of the framework that have pricing are set with floor and ceiling, but there are multiple different frameworks that we're continuing to use. And since the last call in these new 10, we've signed a range of agreements from small to large SCA customers.

We're not commenting specifically, even in the previous question, not specifically breaking out which one just commenting that we now have SCAs across all of our business units, and we have SCAs ranging from small to large, even in the last 10 that we signed. And of course, in the total 26.

Operator

Your next question comes from the line of Chris Caso from Wolfe Research.

Christopher Caso

I guess our first question, if you could address the CapEx and the fab construction CapEx, the construction CapEx as compared to the tool purchases. And what I seem to hear in the comments is that the construction CapEx was increasing faster. And I'm not sure I interpreted that correctly. But understand that there's the clean room space constraints are constraining the ability to bring in tools for this year. But the increase in construction CapEx is obviously interesting because it doesn't result in bit production until at least '29, probably beyond that.

Manish Bhatia

So Chris, I can start and then maybe Mark can add. But I mean, that's exactly right, is that the principal constraint in the industry is on clean room space because we -- the strong growth of AI in this demand vector has come on relatively recently in terms of the time line that it takes to build these clean rooms. So while we're all starting. That's why we're focusing there. And then -- you're right that we did comment that the majority of the construction CapEx increase for fiscal '27 versus our prior plans is for clean rooms that will come online in late '28 and beyond, which shows both how long it takes to build these clean rooms and why we need to get started with the construction investments now. But also shows our confidence in longer-term demand, both through the observation of the demand trends in the near term market trends that we're seeing as well as the structure of the SCAs and the discussions we're having with SCAs and customers now extending those commitments beyond 2030. I mean these SCAs are transformational for us in terms of being able to match supply with future demand and to be able to invest as confident.

Mark Murphy

Yes. Chris, maybe I can just add that just to make it clear that the majority of the increase is for construction CapEx. Most of that construction increases to accelerate clean room space availability in '28 and beyond. I mean it is a trend that we would expect to continue to beyond '27. And I think you made a very important point that just the spend there doesn't translate into bits and that these fabs will be made -- we put the equipment in the fabs and produce wafers when needed based on our view of the market and these SCAs are a good way for us to keep a pulse on the market and make sure that we get a return on that CapEx.

Manish Bhatia

And I can just a couple just 1 other point. One other point, Chris, is that we will equip the clean rooms and build capacity to the demand trends that we see. So that's just another important point. And we have been executing long-term supply agreements with equipment suppliers to be able to make sure we have access to equipment as needed. But of course, we'll still equip and build the production capacity in those clean rooms in line with demand trends at the time.

Christopher Caso

Of course. Okay. As a follow-up question, I want to ask a question on the impact of CPU strength. -- both overall bit demand and your view of supply-demand balance. And obviously, that's probably been the biggest incremental surprise since the beginning of the year. You don't have the same trade ratio effects on CPU as you do on HPM. But I guess the question is, how significant is that in contribution to the supply-demand imbalance?

Manish Bhatia

I think definitely, the realization that agent workloads are executed across CPU has been a big driver. There is a large attach rate of both LTE as well as DDR memory and SSD to enable those genic workflows. The -- those agenetic workloads are already starting. You're already starting to see multiple ones, whether in the enterprise or consumers implemented and driving real value. And that's been one of the reasons that server units are growing so strongly, as we noted, in the high teens. And I think the other thing that this shows is that while it's just another vector of logic and logic silicon to grow to be able to take advantage of the AI trends. And so that is driving higher logic silicon and into the overall demand for AI compute and frankly, creating more of a constraint on DRAM and making clear that DRAM is the principal constraint versus logic or power to the data center.

I mentioned the new -- there are many different software implementations for enterprise agentive workflows that we're all seeing. But seeing how quickly Meta's music just in the last couple of weeks since being released is just an example of how quickly the agenetic workloads are realizing -- enabling consumers to realize real value.

Operator

Your next question comes from the line of Joseph Moore from Morgan Stanley.

Joseph Moore

Great, in terms of supply growth decelerating next year, I guess that's a little surprising in the context of the CapEx. And I know you talked about some of the dampening effects of HBM, but I don't think that delta should be changing that much. So I just wonder if you could just kind of explain what the puts and takes are that supply would decelerate given the CapEx that you see.

Manish Bhatia

Sure, Joe. And you're asking for both DRAM and NAND?

Joseph Moore

Yes, but principally DRAM.

Manish Bhatia

Okay. I mean I think that we gave the color that HBM is growing faster than conventional DRAM. And the trade ratio as you move more of the industry is shifting formation of HBM 3E to HBM 4 and then towards later in the year in '27 HBM 4E and these are increasing trade ratio. So if you just look at both of those two things happening together, that has a dampening effect on the ability for bit growth to be growing. And keep in mind that both the bit growth for us and other industry participants from new technology nodes, both over time as you make more of your transition, you don't have the timing of transitions affect how much big growth you can have as well as the nature of the diminishing returns of each of those newer nodes.

So these are all the factors that are going to be constraining supply. But of course, the principal 1 is clean room space for everyone. And even though there's -- we're going to be having first wafer output from our Idaho facility mid-calendar '27 and others in the industry as well, maybe opening clean rooms, meaningful supply growth takes a few quarters after that. So I think that's really the -- those are all the reasons why we see that DRAM is reducing supply industry shipments next year.

Joseph Moore

Okay. That's helpful. And then to the extent that if you end up having been conservative on industry supply and there's more supply next year -- can you talk about -- I mean it seems like there's a lot of pent-up demand. There's a lot of appetite to have more supply. We've seen specking out of necessity for some of these AI RAC and things like that? It seems like they'll just respect to higher levels if there's more supply, but am I too optimistic there? Just how do you think about that?

Manish Bhatia

Yes. No, I think that's exactly the point that these are and Sanjay mentioned this on the main call, we definitely think that our customers are choosing to maximize the compute silicon shipments they can make with the available memory supply that they have. And as that does create latent demand for more memory to attach to those, which would then end up delivering higher system performance and improved performance at the end customers. But -- and so I guess that leading demand, I think, is aligned with your concept that where more memory to become available, it would have -- it would easily get put into use in higher content growth in AI workloads, whether attached to accelerators or CPUs.

Operator

Your next question comes from the line of Mehdi Hosseini from Susquehanna International Group.

Mehdi Hosseini

A couple of follow-ons for me. You did highlight your NAND bit shipment in is tracking below industry average. But what should we expect '27 through '28? Would you be able to be of the shipment in line with the industry average of 25%.

Manish Bhatia

Mehdi, we're not commenting out that far, frankly, on either DRAM or NAND. We do expect conditions to be tight on NAND overall even as the industry is expected to grow in the mid-20% range in calendar '27 and '28. Some of the factors that account for our supply growth, we did -- we are utilizing some of the clean room space in Singapore now for our advanced R&D line for future NAND growth. We are also preparing for the ramp of our HBM facility in Singapore next year. And so some of the existing clean room from pilot operations. And so that's some of the reasons why our supply growth grew less than the industry this year. But we feel confident in our technology, and we do expect that our continued ramp to Gen 9 will provide good, very high ROI, cost-effective supply for us as we move forward. And then, of course, we do have the new clean room that we broke ground on earlier this year that will come online in the second half of calendar year '28.

Mark Murphy

Mehdi, just maybe if I can interject just because of time here. And then if you've got additional -- well, why don't you start with your question and then second question, I'll make a comment after that. .

Mehdi Hosseini

Sorry, Mark. I didn't mean to interrupt you. But very quickly, I just want to get the team's opinion. When I look at DRAM, especially at the wafer level, the devices are all the same. And I argue that there is a fungibility of DRAM at the wafer level. And then there are some differentiation in the back end. And this fungibility at a wafer level hasn't been seen before because in the past, the cycles were driven by just one product, and there was a significant concentration of customers. So am I right with this assumption that fungibility of the DRAM at the wafer level gives you a better way of managing DRAM costs. Does that make any sense to you?

Scott DeBoer

Maybe start with 1 thing. I think there's a bit of what you say, but I actually probably would have gone the other direction. And if you look at the front end variability or what we do differently on the DRAM processes between optimizing for HBM, optimizing for high-performance EssoChem, LPDRAM and optimizing for DDR6. There's, at this moment in time, probably more different than ever in the history of DRAM. And the same node, the different kinds of products that we have to build on it and a lot more differentiation built into those. I don't know what you would add.

Manish Bhatia

Yes, I mean I would say that it really helps us with in the near term, the fact that we do run the different products in the same manufacturing lines, it does help us adjust mix. We don't have to run products in different fabs. We can run them on the same lines. But as Scott mentioned, each product has its own vector is trying to optimize. Obviously, in HBM, it's bandwidth with the TSVs and that requires unique process steps in DDR and LP, they each have their own as well process steps that are unique. And so I think the most important part of the fungibility is that we do have the ability to flex wherever demand is or even mix adjustments to try and meet our customers' requirements. I think that's probably the -- all within the same fab, that's probably the most important part. But I wouldn't say that it helps necessarily with cost.

Mark Murphy

Yes. I think, Mehdi, just I think we're at the end of the call. And I am really happy to hear the nature of the questions being focused on technology and the longer-term strong foundation and performance of the business. And I just -- I thought there'd be a question that let me just do a couple of housekeeping things. that I thought would come up earlier. Our first quarter guidance factors in a single-digit sequential bit growth and double-digit for cost for both DRAM and NAND and I wanted to make sure you had that for your modeling. And then also, excluding the incentive comp effects, the year-over-year R&D is going to be more than the $1 billion that we said last quarter, will be over $1 billion in '27 as we have added additional R&D activities. So again, I wanted to just make sure we got that out for your modeling.

Operator

This concludes the Q&A and today's call. Thank you for attending. You may now disconnect.