Micron Technology's CEO, Sanjay Mehrotra, has outlined the company's new $250 billion U.S. investment plan, a strategic move by the chipmaking giant to address the surging demand for memory storage in the era of artificial intelligence. The Boise-based firm announced on Thursday that this multi-billion dollar investment will support its long-term goal of producing 40% of its DRAM chips in the United States.
Micron Technology (NASD: MU) CEO stated that current demand for memory is at unprecedented levels, with a severe shortage in the market. Mehrotra made these remarks during an appearance on the "Claman Countdown" program.
The company, which already operates semiconductor plants in Idaho and Virginia, is expanding its footprint by establishing a new manufacturing facility in central New York. FOX Business correspondent Liz Claman joined the CEO for the first concrete pour ceremony at the new site.
Mehrotra emphasized to Claman that memory is a critical enabler for AI innovation, noting that data centers account for over 50% of the demand. He explained that memory is essential for AI, as it drives the demand while simultaneously enhancing AI performance through improved accuracy, speed, and intelligence.
While data centers are a primary driver of demand for Micron's products, nearly all modern technologies reliant on data storage—including smartphones, computers, and automobiles—also require memory. The CEO highlighted the broad and robust demand, stating its crucial role for AI across data centers, consumer electronics, automotive, industrial, defense, and aerospace sectors. He specifically noted that vehicles, especially fully autonomous ones, function like mobile data centers requiring significant memory and storage capacity.
Micron's technologies, including DRAM, NAND, and NOR chips, support compute-intensive applications and the evolution of AI platforms. The company plans to invest $30 billion in the domestic U.S. semiconductor industry to bolster American manufacturing strength.
Mehrotra anticipates that demand will only grow with advancing technology, as more complex systems require greater computing power and memory capacity. Looking ahead, he pointed to developments in robotics and the proliferation of autonomous vehicles, which rely on intelligence fundamentally rooted in data stored within memory.
The investment program is expected to create thousands of direct and indirect jobs while expanding domestic chip manufacturing. Despite efforts to accelerate supply both locally and globally, Mehrotra acknowledged that soaring demand continues to outpace supply, with no clear timeline for when supply might catch up.
SK Hynix CEO Predicts Peak Memory Shortage Next Year
In a separate development, SK Hynix CEO Kwak Noh-jung stated in an interview that 2027 would be the "most severe year" for memory shortages. This follows SK Hynix's successful U.S. IPO, which raised $26.5 billion, setting a record for a foreign company listing.
While Kwak identified next year as the peak of the shortage, he expects the issue to persist until at least 2030. He indicated that from a supply perspective, next year is forecast to be the worst in the industry's history, with customer demand predicted to remain above supply capacity even beyond 2030, though efforts are being made to address the problem.
This view aligns with earlier comments from SK Group Chairman Choi Tae-won in March, who also projected shortages lasting until 2030, with both SK Group and Samsung identifying 2027 as a critical juncture.
The demand for DRAM is largely driven by High Bandwidth Memory (HBM) used in AI accelerators. HBM features a far more complex manufacturing and packaging process compared to consumer-grade DDR5. Beyond complexity, HBM also consumes more wafer capacity, forcing major memory manufacturers to reallocate supplies and exacerbating the already tight market.
Market Dynamics and Stabilization Signals
Such forecasts are challenging. While a prolonged shortage beyond 2030 would benefit SK Hynix economically—the company recently posted record quarterly revenue—its rival Micron Technology has seen its stock price surge approximately 213% this year to around $990.
However, Kwak's comments are not merely about boosting SK Hynix's stock. The past few months have seen both Micron and SK Hynix sign multiple Long-Term Agreements (LTAs). These contracts commit to supplying specific companies over several years and set price floors and ceilings for the agreement duration. While LTAs do not directly influence spot market prices, they secure future demand. The recent flurry of LTA signings has helped solidify DRAM supply commitments.
Although memory prices, including for NAND flash, are expected to remain elevated in the coming months, signs of market cooling have emerged. A report from TrendForce earlier this month indicated DRAM contract prices for the third quarter of 2026 increased 15% to 18% quarter-over-quarter. While a significant rise, this is notably lower than previous quarterly increases observed.
The memory market is gradually stabilizing, but this stability comes at a high price point. How long this equilibrium will last is uncertain. While memory brands like SK Hynix have insights into market trends, these trends can shift rapidly. This year alone has witnessed a significant reallocation of AI-related spending toward CPUs, which propelled Intel (NASD: INTC) shares to record highs while erasing approximately $1 trillion from Nvidia's market value—a scenario nearly impossible to predict just a year ago.
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