Dive Brief:
- Micron reported record-breaking financial results Wednesday, as the AI boom spikes demand for chips and memory, and industry supply remains constrained with low levels of inventory relative to demand.
- For Micron’s fiscal quarter ending Feb. 26, revenue reached $23.9 billion, nearly tripling year over year and an increase of almost 75% quarter over quarter. The manufacturer also set new records in gross margins, earnings per share and free cash flow.
- To keep up with demand, Micron is making several expansions to its global manufacturing footprint, including an additional cleanroom in Taiwan and a second fabrication site in Idaho.
Dive Insight:
Micron’s business sits right at the “heart of this AI revolution,” Micron CEO Sanjay Mehrotra said during the company’s earnings call Wednesday afternoon.
As artificial intelligence models advance, the technology requires greater memory and storage to sustain performance. Memory, in particular, allows AI to use longer context windows and have deeper reasoning — making AI “smarter and more capable,” Mehrotra said.
“Without faster memory, AI just cannot scale up. AI just cannot deliver the capabilities,” the CEO added.
As a result of AI’s advancements, Micron is reaping the financial benefits. But it’s also aware that it needs capacity to meet customer supply commitments. To keep pace, Micron is building, acquiring and expanding myriad manufacturing sites.
Last week, the manufacturer finalized its acquisition of a Powerchip Semiconductor Manufacturing Corp. fabrication site in Taiwan. By fiscal 2028, Micron expects to ship products from the fab. The site includes 300,000 square feet of cleanroom space, which prevents contamination to protect sensitive chip and wafer manufacturing in the semiconductor industry. In addition, Micron plans to construct a second cleanroom of similar size there by the end of this fiscal year.
Micron also broke ground on a fab in New York during the quarter. “Initial ground preparation activities are ahead of plan,” Mehrotra said.
The manufacturer is also prepping its second fab in Idaho. The first Idaho fab is expected to produce its initial wafers by mid next year. Micron also has R&D operations in the state, and the CEO said the co-location of research with manufacturing will speed up product time to market.
All told, Micron has laid out plans to invest $200 billion in U.S. manufacturing and research and development capacity.
Globally, in addition to Taiwan, the manufacturer is operating or preparing facilities in India, Japan and Singapore.
The investment and capacity-building spree led one Barclays analyst on the earnings call to question if Micron might run into an oversupply issue in the coming years. But Micron leadership continues to be bullish on long-term customer demand.
Mehrotra said the industry is currently facing an “unprecedented gap between supply and demand” and “we continue to expect supply-demand conditions for both DRAM and NAND to remain tight beyond calendar 2026.” The CEO said he sees abundant opportunities ahead, especially as enterprise AI deployment “is still very, very low.”
As Micron builds out manufacturing sites across the globe, executives anticipate construction-related capital expenditures to grow by $10 billion year over year next fiscal year. Capital spending amounted to $13.8 billion last year, although executives did not specify how much of the spend was construction related.
Operating expenses are also expected to rise, due to a ramp up of R&D investment “in support of an unprecedented set of long-term opportunities in memory and storage,” CFO Mark Murphy said on the call.
Micron forecasts it will generate $33.5 billion, plus or minus $750 million, in revenue this current quarter, which would be a nearly $10 billion increase over the prior quarter.
