A new factory costs $20 billion and takes five years. That's the moat.
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✦ The bottom line
Memory used to be a low-margin commodity. Right now Micron keeps 74¢ of every dollar — almost double what it kept a year ago.
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✦ Teach me
Cents kept per dollar of sales
For every $1 a customer pays, some covers the cost of making the chip — silicon, factory power, packaging. The amount Micron keeps before paying for offices, R&D, salaries.
The more demand, the more pricing power. The more pricing power, the higher this number.
Wall Street calls this
Gross margin
When this number doubles in a year, it tells you the market is paying *whatever Micron asks*.
Cents Micron keeps per dollar · latest quarter
74
¢
A year ago it was 37¢. The number didn't slowly improve — it doubled. That's the AI shortage showing up in numbers.
Source · 10-Q · Income Statement · Q2 FY26 · Filed Mar 19, 2026
Going from 37¢ to 74¢ in a year is extraordinary — but only if it means Micron has more pricing power than everyone else. If every memory maker doubled their margins, that's just AI demand lifting the whole boat: a cycle, not a moat. If only Micron's margins doubled while peers stayed put, that's a real competitive edge. The test is straightforward: how is the closest comparable company doing on the same metric?
Micron vs. its closest US peer · pricing power
Cents kept per dollar of sales — most recent reported quarter
Micron
74¢
Western Digital
50.2¢
Western Digital (NAND-focused memory) is also at boom-cycle margins — 50¢ per dollar, a level you almost never see in memory. Micron's 74¢ is even higher. Both are at the top of the cycle.
Source · 10-Q · Western Digital Q3 FY26 — gross profit / revenue · Filed May 1, 2026
How the moat got built
2000s
Memory industry has 20+ players. Margins are thin. Constant boom-and-bust.