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AI · Memory Chips · Micron · Supply Shortage
Micron Technology shares surged nearly 16% after forecasting second-quarter adjusted profit at nearly double Wall Street expectations, driven by a global memory chip supply crunch and robust demand from AI data centers.
This memory shortage, impacting industries from smartphones to data centers, has significantly boosted prices, generating "incredible market pricing" for Micron and its memory chip peers, according to Morningstar analysts. Micron, one of only three major suppliers of high bandwidth memory (HBM) chips essential for AI technology, has seen its share price climb over 160% this year, with Samsung and SK Hynix also experiencing substantial gains.
CEO Sanjay Mehrotra expects memory markets to remain tight past 2026, a view supported by Wall Street analysts who project supply shortages extending into 2027 despite Micron's increased 2026 capital expenditure plans of US$20 billion. While key customers like Apple maintain stable access to chips, lower-value Android handset providers are susceptible to shortages, contributing to Counterpoint's forecast of a 2.1% decline in global smartphone shipments next year.
