Micron Technology can’t expand fast enough to meet demand.
The memory chip giant is investing $200 billion across U.S. facilities as artificial intelligence systems create the worst supply shortage in over 40 years. MU stock climbed 44% year-to-date, trading around $414 per share with a market value approaching half a trillion dollars.
The Boise-based company is building two massive chip factories on its Idaho campus for $50 billion. Engineers detonate controlled explosions each afternoon to blast through bedrock. They’ve already used over 7 million pounds of dynamite preparing the site.
Each factory spans 600,000 square feet of clean room space. The first plant begins producing silicon wafers in mid-2027, with both facilities operational by late 2028.
Near Syracuse, Micron broke ground on a $100 billion complex representing New York’s largest private investment ever. The company also announced a $9.6 billion facility in Hiroshima, Japan.
Competitors are racing to add capacity too. SK Hynix revealed a $13 billion South Korean plant and $4 billion Indiana complex in January.
The building frenzy stems from AI’s explosive memory requirements. Large language models need far more capacity than previous technology generations.
Processors from Nvidia, AMD, Google and Broadcom all require faster memory chips for training models and running inference. Companies like OpenAI, Oracle and Anthropic have announced data center projects worth trillions.
Scott Gatzemeier, leading Micron’s U.S. expansion, has worked at the company for 28 years. “I’ve never seen anything so disruptive as AI,” he said.
Memory shifted from commodity product to strategic asset virtually overnight. Micron realized it lacked adequate clean room capacity to satisfy demand.
The supply crunch triggered a gold rush for memory manufacturers. MU shares rose over 500% since April 2024.
Gross margins tell the transformation story. Micron’s margins stood at 18.5% in early 2024 when memory was still a low-margin commodity business.
They jumped to 56% last quarter. The company expects margins to hit 68% this quarter, approaching Nvidia’s premium 73% on flagship GPUs.
CFO Mark Murphy told investors Wednesday that Micron meets only half to two-thirds of demand for key customers. Buyers now seek multi-year contracts to guarantee supply and avoid price spikes.
“There is no easy or fast way to get that done,” Murphy said about adding capacity.
Taiwan’s Commercial Times reported DRAM contract prices surged over 170% in the past year. DDR5 chips saw even steeper increases.
Circular Technology, a Massachusetts data center hardware reseller, says DDR5 prices jumped nearly 500% since September. “We’re nowhere near the end of the shortage,” said Brad Gastwirth, the company’s research head. “I think it lasts through the end of 2026 and at least the first half of 2027.”
Between August and October, major AI developers announced massive data center projects. Micron noticed high-bandwidth memory demand exploding.
Chief business officer Sumit Sadana said supplies of HBM4 and HBM3e chips are completely sold out through year-end. The company is already shipping HBM4 to customers with more shipments expected next quarter.
Early February saw MU stock briefly dip after research firm SemiAnalysis reported Micron’s HBM4 chips failed to secure spots in Nvidia’s Vera Rubin servers. The report suggested data transmission speed concerns.
Sadana called the reports inaccurate. Nvidia declined to comment on supplier relationships.
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