Micron’s heavy factory spending overshadows booming memory sales

Published Thu, Mar 19, 2026 · 10:58 AM

[SEATTLE] Micron Technology warned that it will need to spend heavily on production to meet burgeoning demand, overshadowing a generally upbeat forecast from the largest US maker of computer memory chips.

Capital spending will exceed US$25 billion this fiscal year, which runs till August, the company said as part of its quarterly report on Wednesday (Mar 18). Analysts had estimated US$22.4 billion. Micron added that 2027 expenditures will increase more than US$10 billion from the prior year.

“We project our fiscal 2027 capex to step up meaningfully,” chief executive officer Sanjay Mehrotra said during a conference call.

The heavy spending reflects the cost of keeping up with an insatiable appetite for Micron’s memory chips, especially the high-bandwidth components used in artificial intelligence (AI) computing. Though Micron’s sales are expected to keep soaring, the latest report drew a chilly reception from investors. The shares fell as much as 4.9 per cent to US$439.

Fiscal third-quarter revenue will be approximately US$33.5 billion, the Boise, Idaho-based company said. Analysts estimated US$23.7 billion on average for the period. Excluding some items, profit will be about US$19.15 a share, compared with a projection of US$11.29.

Memory prices have been soaring because of shortages fuelled by AI computing demand. High-bandwidth memory is critical to the data transfer needed for training and running AI models. That’s led memory makers to allocate more production to these higher-margin orders, hurting supply of other types of memory and causing price spikes.

Micron shares had risen 62 per cent this year heading into the report, making it the best-performing stock on the closely watched Philadelphia Stock Exchange Semiconductor Index.

For the fiscal second quarter, which ended Feb 26, sales nearly tripled to US$23.9 billion. Earnings climbed to US$12.20 a share. Analysts had estimated US$19.7 billion in revenue and US$9 a share in profit on average, according to data compiled by Bloomberg.

The company and other memory-chip makers have benefited from an unprecedented data centre build-out. Their market is dominated by just three providers, Micron, Samsung Electronics and SK Hynix, and demand is expected to stay strong for years to come.

Memory shortages have been good for Micron and its peers, but hard on the broader tech industry and consumers. Supply constraints have raised prices and lowered the number of smartphones and computers slated to ship this year. HP said last month that the company has seen memory prices roughly double in the current quarter from the previous period.

The global shortage is likely to persist another four to five years because of endemic constraints in semiconductor production, Chey Tae-won, head of SK Group, said this week.

In the AI market, Micron is working to ramp up production of new high-bandwidth memory, or HBM4. A big question is how much Nvidia will rely on Micron for that component.

Any decision by Nvidia to limit its use of Micron for the new Vera Rubin line, and instead favour rival products, would be a significant blow.

Nvidia is the dominant maker of AI accelerators, the main processors used to power AI. Memory components from Micron and its competitors assist those chips in holding and managing data.

Last month, Micron shares surged after chief financial officer Mark Murphy assured investors that the company is producing HBM4 in high volumes. BLOOMBERG