Nvidia's CFO Just Explained Why the AI Boom Is Eating Its Gross Margin -- and It's a Green Light for Micron - The Globe and Mail

NVIDIA's Q2 2027 earnings report showcased robust growth, with data center sales up 117% year-over-year and total revenue reaching $96.2 billion, more than double the prior year’s figure. Despite this... Read original →

NVIDIA's declining gross margin reflects an inevitable supply chain imbalance amid surging AI compute demand. Rising costs of high-bandwidth memory (HBM) are directly pressuring profitability, signaling a shift in the upstream memory supplier landscape. Micron, as a key HBM provider, is capitalizing on pricing power, indicating a transition from volume to value in the semiconductor chain. This evolution underscores the semiconductor industry's move from 'volume growth' to 'value capture,' especially in data center expansion. TSMC, while not directly benefiting from memory price hikes, faces intensified capacity constraints due to 3nm demand. Geopolitical tensions between Taiwan, China and the U.S. further complicate access to critical materials and equipment. Over the next 12 to 24 months, sustained AI infrastructure growth will likely maintain elevated memory prices, propelling the industry into a new era defined by capital intensity and rapid technological turnover.