The CEO of American memory chip manufacturer Micron Technology, Sanjay Mehrotra, has issued a warning that the current global memory shortage could persist beyond 2026, with truly substantial new industry capacity not expected to come online until around 2028.
Amidst the AI wave that has elevated memory chips to a status akin to "new oil," the memory sector is experiencing a supercycle. Micron has initiated a major multi-state investment program in the United States, with a total investment scale reaching $200 billion.
"The construction of facility infrastructure is currently the longest-lead-time and most challenging part of the cycle. Even after the civil construction is complete, equipment installation and commissioning also require a lengthy period," Mehrotra stated during an interview at the company's Manassas, Virginia facility. This plant recently commenced volume production of DRAM using the nation's first "1-alpha" process node, marking a key step in Micron's reshoring of advanced memory manufacturing.
Due to the global shortage of memory chips, Micron is undertaking a significant capacity expansion. According to previously disclosed plans, the company will build two advanced wafer fabrication plants in Boise, Idaho. The first is expected to produce its initial wafers by mid-next year, with the second slated for late 2028. In Syracuse, New York, Micron is planning a production cluster of up to four fabrication plants. Overall, Micron plans to invest up to $200 billion across the U.S., aiming to increase the proportion of its domestic output to 40% of its global total, up from the current approximately 10%.
As capacity expansion takes time, Micron is currently unable to fully meet the demands of its key customers. Mehrotra revealed that the company is currently fulfilling only 50% to two-thirds of the requirements of its core customers, indicating a significant supply-demand gap.
"We anticipate that the industry will begin to see the emergence of truly large-volume new capacity around 2028," Mehrotra emphasized, noting that memory manufacturing is a capital-intensive business with extremely long construction cycles, and the time from groundbreaking to operational readiness far exceeds common perception.
The memory industry is well-known for its strong cyclicality, characterized by alternating periods of boom and bust. Micron's massive investment has also raised concerns among investors.
In response, Mehrotra clearly stated that Micron will adhere to "rigorous, rational discipline." The timing for installing production equipment in new facilities will depend entirely on precise assessments of the latest market demand trends. "The core principle is to make the right strategic moves in advance, ensuring we have the capacity readiness to respond to market needs at any time," he said.
Currently, Micron is actively signing long-term supply agreements with customers to secure supply chain certainty and predictability. This approach safeguards customer interests while also instilling confidence in Micron's own large-scale, long-term investments.
It is noteworthy that, as the sole U.S.-based memory manufacturer, Micron has received strong support from the U.S. government on issues of domestic supply chain security. Officials, including U.S. Secretary of Commerce Howard Lutnick, have recently voiced support for the company on multiple occasions. The government is even promoting more proactive "national industrial policies" to catalyze and incentivize domestic semiconductor manufacturing.
Mehrotra stated that Micron's investments in the U.S. will directly create 90,000 high-paying jobs. To support this process, the company is fully engaged in deep collaboration with local communities, universities, research institutions, and support systems, and is even advancing related apprenticeship training programs.
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