Micron stock increased by almost 8 percent on Friday, as investors sought to invest in AI chip supply chain stocks following Taiwan Semiconductor Manufacturing Co. reporting strong earnings on Thursday, which indicated further spending on AI infrastructure.
The stock of Micron, a manufacturer of artificial intelligence system memory and storage, has surged over 250 percent in the past year, and it is experiencing a surge in demand.
AI systems use memory to store large quantities of data near a graphics processing unit, or GPU, so they can execute large AI models without slowing down.
Micron CEO Sanjay Mehrotra informed CNBC’s Jim Cramer, ″AI driven-demand is accelerating. It is real. It is here, and we need more and more memory to address that demand.”
Mehrotra added that Micron is investing $200 billion to construct additional production capacity in the United States, two fabrication plants, or fabs, in Idaho and a 600,000-foot facility in Clay, New York, where the company broke ground on Friday.
Therefore, Mehrotra added that the facilities, such as clean rooms and production equipment, will require several years to be constructed. The groundbreaking was attended by Commerce Secretary Howard Lutnick. Micron promised to spend $100 billion in that fab.
He further stated that Micron is also making efforts to produce more chips within the current facilities shortly. Micron projected 10 percent growth of server memory by the start of 2025, which came out to be “high teens” by the end of the year.
However, Mehrotra also reported that the company recorded improved PC memory and storage growth than anticipated. Mehrotra said, “We see that tightness continuing into 2027, so we see durable industry fundamentals over the foreseeable future, driven by AI demand.”
The scramble to fulfill the memory requirement of companies such as Nvidia, Advanced Micro Devices, and Google has resulted in a shortage, and the selected inventory, the vital component, is likely to escalate an approximate 55 percent in the first quarter, CNBC had earlier reported.
