Key Takeaways
- Elon Musk says Tesla cut the memory on its AI5 chip by a third, to 96GB, because it was the only way to get enough volume for Optimus production.
- The redesign is evidence that the memory shortage now reaches beyond data centers and into robots.
- Micron’s gross margin has exploded up – from 2.7% in fiscal 2023 to 80.7% in fiscal 2026 – and consensus expects revenue to more than double to about $275 billion in fiscal 2027.
- The main risk is that customers find they need less memory than expected, so watch whether other chip designers follow Tesla.
Micron Technology (MU) has been telling investors that memory is in short supply, and that the shortage isn’t going away:
Micron CFO Mark Murphy just shared on this week’s earnings call that he has “no line of sight” for when the current memory shortage will ease.
And now Tesla (TSLA) has redesigned its own chips around that shortage.
On Thursday, X user @DirtyTesLa posted that estimates call for 200GB of RAM per humanoid robot. At the 10 billion robots that post works from, that’s “2 TRILLION GB of RAM,” against the “~45 billion GB of DRAM” the world makes each year.
Elon Musk’s reply:
“We cut our RAM in half for the Tesla AI5 chip (now 72GB of LP5) and 1/3 for AI6 (now 144GB of LP6). This was the only way to get enough volume for Optimus production and greatly reduces cost.”
The only way. That’s a striking thing for one of the world’s most aggressive hardware builders to admit.
A day later, he walked it back a bit: “Actually, we decided to nudge AI5 up a little to 96GB, as Tesla would otherwise be the only company using the min RAM version of LP5.”
So the AI5 still carries a third less memory than the original 144GB design.
Bottom line: Shortage.
Pricing power, in one chart
When buyers redesign products because they can’t get enough of what you sell, you can charge more. And Micron has been charging more…
Micron’s gross margin was a razor-thin 2.7% in fiscal 2023, its year to August 2023. In fiscal 2026 it was 80.7%, double the 39.8% of the year before.
That’s a seller’s market if I’ve ever seen one.
It’s also spreading to phones.
Isn’t this a demand problem, though?
Musk also said this:
“As it turns out, we think this will have a negligible effect on Optimus performance, as memory bandwidth is a bigger limiting factor than total memory storage (bandwidth was held constant).”
If robots run fine on far less memory than the 200GB bull case assumes, that’s demand that could fall away. And Wall Street is counting on a lot of demand…
Micron’s revenue went from $37.4 billion in fiscal 2025 to $133 billion in fiscal 2026, and consensus from 35 analysts expects about $275 billion in fiscal 2027, then about $313 billion in fiscal 2028.
That’s a steep climb to bet on, and it only holds if customers keep paying up.
Musk noted that Tesla held bandwidth constant, so it still needs fast memory – and that still comes from memory makers like Micron and SK Hynix (SKHY).
The upshot
Micron sounded the alarm on supply, and now one of the world’s most ambitious manufacturers has redesigned its chips around it.
That doesn’t sound like the cycle is about to turn – which is, of course, great news for Micron shareholders.
Of course, if more chip designers follow Tesla and find they can get by on less memory, some of that demand could shrink before the robots ever ship.
So what is Micron stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Micron could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
