TLDR
- Micron Technology is committing $200 billion to U.S. chip production with $50 billion for Boise facilities, $100 billion for Syracuse complex, and $9.6 billion for Japan plant to combat AI-driven memory shortages.
- Gross margins jumped from 18.5% in early 2024 to 56% last quarter, with 68% projected this quarter, approaching Nvidia’s 73% premium levels.
- MU stock rose 44% year-to-date and over 500% since April 2024, trading near $414 with market capitalization approaching half a trillion dollars.
- The company satisfies only 50-66% of current demand as DRAM prices increased 170% annually and DDR5 chip costs soared 500% since September 2024.
- High-bandwidth memory products are sold out through December 2026, with supply constraints expected to persist through first half of 2027.
Micron Technology is blasting through bedrock to keep pace with artificial intelligence.
The memory chip manufacturer is spending $200 billion on U.S. production expansion as AI applications create the tightest supply conditions in over four decades. MU stock advanced 44% in 2026, trading around $414 with a valuation near $500 billion.
Daily controlled explosions shake Boise, Idaho each afternoon as engineers clear basalt rock for two new fabrication plants. The $50 billion investment will double Micron’s existing campus footprint.
Construction teams have detonated more than 7 million pounds of dynamite. Each facility spans 600,000 square feet of clean room manufacturing space.
The first Boise plant begins wafer production in mid-2027. Both sites reach full capacity by late 2028, making DRAM chips for high-bandwidth memory used in AI systems.
Micron’s Syracuse, New York project represents a $100 billion commitment and the state’s largest private investment ever. The company also allocated $9.6 billion for a Hiroshima plant.
Competitors are matching the pace. SK Hynix unveiled plans for a $13 billion South Korean facility and $4 billion Indiana complex. Samsung continues expanding across multiple regions.
Why Memory Became Strategic Infrastructure
Generative AI models require dramatically more memory than previous computing workloads. Training large language models and running inference operations demand faster data access and greater capacity.
Nvidia, AMD, Broadcom and Google processors all need advanced memory chips to function. Companies including OpenAI, Oracle, xAI and Anthropic announced data center investments totaling trillions.
Scott Gatzemeier leads Micron’s U.S. expansion after nearly three decades with the company. “I’ve never seen anything so disruptive as AI,” he said. “We just didn’t have enough clean-room capacity to satisfy demand.”
The shortage transformed memory from commodity product into critical bottleneck. MU shares jumped over 500% since April 2024 as the market recognized the shift.
Profit Transformation Reshapes Industry
Financial performance reflects the dramatic change. Micron’s gross margins measured just 18.5% in early 2024 during the commodity era.
Margins reached 56% last quarter. The company forecasts 68% this period, nearing Nvidia’s 73% on graphics processors.
CFO Mark Murphy told investors Wednesday that Micron meets roughly half to two-thirds of certain customer requirements. Buyers now pursue multi-year contracts to lock in supply and pricing.
“There is no easy or fast way to get that done,” Murphy said regarding capacity expansion.
Market pricing confirms the squeeze. Taiwan’s Commercial Times reported DRAM contract rates climbed over 170% in the past year. DDR5 memory showed even sharper increases.
Circular Technology tracks data center hardware markets from Massachusetts. The firm reports DDR5 prices surged nearly 500% since September.
“We’re nowhere near the end of the shortage,” said Brad Gastwirth, Circular’s research director. “I think it lasts through the end of 2026 and at least the first half of 2027.”
Inventory Depleted Through Year-End
Micron observed high-bandwidth memory demand accelerating between August and October as cloud providers announced major expansions. Management accelerated the second Boise facility in response.
Chief business officer Sumit Sadana confirmed both HBM4 and HBM3e products are completely sold out through December. The company currently ships HBM4 to customers with more deliveries planned next quarter.
MU stock dipped briefly in early February after SemiAnalysis reported Micron’s HBM4 chips failed to qualify for Nvidia’s Vera Rubin server platform. The research note cited data speed concerns.
Sadana called the reports inaccurate and said customer shipments continue as planned. Nvidia did not respond to requests for comment.
