Micron (MU.US) CEO: Severe shortage of memory, demand like never before.

Micron Technology, Inc. CEO Sanjay Mehrotra detailed the company's new $25 billion U.S. investment plan, as the chip manufacturing giant aims to address the surging demand for memory storage in the era of artificial intelligence. The Boise-based technology company announced on Thursday that the billion-dollar investment will help Micron achieve its long-term goal of producing 40% of DRAM chips in the United States. "The demand for memory has reached unprecedented levels. There is a severe shortage of memory," Mehrotra said on Thursday in an interview with the "Claman Countdown" program. Micron Technology, Inc. already has semiconductor factories in Idaho and Virginia, and is now expanding its business footprint by establishing a new manufacturing facility in central New York. FOX Business's Liz Claman joined the CEO for the groundbreaking ceremony at the new site. Mehrotra told Claman that memory is a key driver of innovation in artificial intelligence and that data centers account for more than 50% of the demand. "Memory is crucial for artificial intelligence," he said. "Artificial intelligence is driving the demand for memory, and the value of memory is evident here, as it can enhance the performance of artificial intelligence." Mehrotra explained that larger memory can improve accuracy, speed, and intelligence of artificial intelligence. While data centers are driving the demand for Micron, almost all modern technologies that rely on data storage, including smartphones, computers, and cars, also require memory. "The demand for memory in the market is very strong today," the CEO stated. "Memory is essential for artificial intelligence in fields such as data centers, consumer electronics devices, automobiles, industrial applications, defense, aerospace, and more." "Your phone, computer, and car, they all need memory," he added. "Cars, especially fully autonomous cars, are like moving data centers. They require a lot of memory and storage space." Micron Technology, Inc.'s technology, including DRAM, NAND, and NOR chips, supports the evolution of compute-intensive applications and artificial intelligence platforms. The company plans to invest $30 billion in the U.S. domestic semiconductor industry to enhance America's manufacturing strength. Mehrotra expressed that with the continuous advancement of technology, the demand will only grow, pointing out that more complex systems require more powerful computing and memory capacity. "Looking ahead, when we look at the development of Siasun Robot & Automation technology and the proliferation of fully autonomous vehicles, all of this requires intelligence. The core of intelligence is data. Where is data stored? It's stored in memory," he said. Micron expects the plan to create thousands of direct and indirect job opportunities, while expanding the domestic chip manufacturing industry. Mehrotra expressed his hope that this investment will promote domestic production, even though the skyrocketing demand still outstrips supply. SK Hynix CEO: The most severe memory shortage next year SK Hynix CEO Kwak Noh-jung stated in an interview with Reuters that 2027 will be the "most severe year" for memory shortage. Earlier, SK Hynix successfully completed its IPO on the U.S. stock market, raising $26.5 billion, setting a record for the largest IPO scale by a foreign company. While Kwak believes next year will see the most severe memory shortage, he anticipates the shortage will continue until 2030. "We forecast that from the supply perspective, next year will be the worst year in industry history. We still predict that even after 2030, customer demand will remain higher than our supply capacity. But we are doing our best to address this issue," he told Reuters. In March of this year, SK Group Chairman Choi Tae-won also stated that the memory shortage will persist until 2030. Both SK Group and Samsung have indicated that 2027 will be a crucial point for the memory shortage. DRAM demand is largely driven by the use of HBM in artificial intelligence accelerators, with HBM's manufacturing and packaging processes far more complex than consumer-grade DDR5. Aside from the complex manufacturing process, HBM's wafer capacity is higher than DDR5, forcing major memory manufacturers to reallocate supply and exacerbate the already tight supply situation. Predictions like these are tricky. SK Hynix hopes the memory shortage will continue, even post-2030, as it aligns with their economic interests. SK Hynix's quarterly revenue hit a new high, while its competitor Micron Technology, Inc. has seen its stock price rise by 213% this year, reaching around $990. However, Mr. Kwak's comments are not just to buoy SK Hynix's stock price. Over the past few months, we have seen Micron and SK Hynix sign several long-term supply agreements (LTA). These agreements commit to supplying products to specific companies in the future, stipulating price floors and ceilings during the agreement term. While LTAs do not directly impact market prices, they can ensure market demand, and we have seen a significant number of LTAs signed in recent months, bolstering the supply of DRAM. While memory (including NAND flash) prices are expected to remain high in the coming months, we have seen signs of cooling in the market. A report released earlier this month by TrendForce indicated a 15% to 18% quarter-over-quarter increase in DRAM contract prices in the third quarter of 2026. This is a significant increase but much lower than the previous quarter-over-quarter increases we have seen. The memory market is gradually stabilizing, but this stability is premised on very high prices. How long this stability will last, no one can predict. While memory brands like SK Hynix can perceive market trends, these trends are constantly changing. Just this year, we saw a significant shift in AI spending towards CPUs, driving Intel Corporation's stock to record highs and causing NVIDIA Corporation's market value to evaporate by roughly $1 trillion; a year ago, this situation would have been almost unpredictable. This article is reprinted from the WeChat public account "Semiconductor Industry Observation". GMTEight editor: Chen Yufeng.