Micron stock rose 6% Friday as investors looked to buy AI chip supply chain stocks after Taiwan Semiconductor Manufacturing Company reported robust earnings on Thursday, signaling continued AI infrastructure spending.
Shares of Micron, one of the makers of memory and storage for artificial intelligence systems, are up 52% over the last month, as memory is in a worldwide shortage and seeing a surge of demand. Memory is used in AI systems to keep large amounts of data close to the graphics processing unit, or GPU, so it can run large AI models without slowing down.
“AI driven-demand is accelerating,” Micron CEO Sanjay Mehrotra told CNBC’s Jim Cramer. “It is real. It is here, and we need more and more memory to address that demand.”
Mehrotra said that Micron is spending $200 billion to build more production capacity in the U.S., including two fabs in Idaho and a 600,000-foot facility in Clay, New York, where the company broke ground on Friday. Mehrotra said it will take a few years to build out the facilities, including clean rooms and production equipment. Commerce Secretary Howard Lutnick attended the groundbreaking. Micron said it would invest $100 billion in that fab.
He added that Micron is also working to produce more chips in its existing facilities in the near-term.
At the beginning of 2025, Micron expected 10% growth for server memory, but that it ended up being “high teens” by the end of the year. Mehrotra also said the company saw stronger-than-expected growth in memory and storage for PCs.
“We see that tightness continuing into 2027, so we see durable industry fundamentals over the foreseeable future, driven by AI demand,” Mehrotra said.
The rush to supply the memory demand of companies like Nvidia, Advanced Micro Devices and Google has led to a shortage, and prices for the essential component are expected to rise an estimated 55% in the first quarter, CNBC previously reported.
