Micron Technology Inc. (MU) says the global DRAM shortage is unprecedented and will last beyond this year as demand from AI data centers continues to rise. The company says the pace of the shortage picked up over the past quarter, driven mainly by heavy orders for advanced memory used in AI systems.
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According to Micron, high-bandwidth memory used in AI servers is taking up a large share of industry capacity. As a result, there is less supply available for standard DRAM used in phones and PCs. Micron says this shift is now affecting a wider group of customers than before.
Company executives say even traditional buyers are now trying to secure memory supply for years ahead. At the same time, Micron says new demand from areas like autonomous vehicles and robots is adding more pressure.
Meanwhile, MU shares jumped 7.76% on Friday, closing at $362.75.
AI Demand Pushes Consumer Devices Aside
According to Micron, AI infrastructure is now the main force shaping the memory market. Large data centers use far more memory per system than older computing systems. Due to this, suppliers are prioritizing long-term enterprise customers.
As a result, consumer markets are starting to feel the impact. PC and smartphone makers are facing higher costs and tighter supply. Industry researchers estimate that global smartphone shipments could fall this year as memory prices rise.
Some device makers have already warned that higher memory costs may affect production plans. In addition, Micron says many customers are now competing for a limited supply that was once easier to access.
Micron Expands U.S. and Asia Production
In response, Micron is expanding its manufacturing footprint. The company recently broke ground on a $100 billion DRAM project near Syracuse, New York. That site is expected to include four large factories, although the first output is not expected until 2030.
Micron is also adding new capacity in Boise, Idaho, with the first factory there set to begin production in 2027. At the same time, the company is upgrading an existing plant in Virginia.
Meanwhile, in Asia, Micron agreed to pay $1.8 billion for a site in Taiwan that already has a working plant. This move allows Micron to bring new DRAM supply online faster, with meaningful output expected in the second half of 2027.
Overall, Micron says these projects support its goal of producing 40% of its DRAM in the U.S. The company says this expansion is needed because demand from AI customers continues to outpace supply across the industry.
Is MU a Good Stock to Buy Right Now?
On the Street, Micron holds a Strong Buy consensus, based on 26 analysts’ ratings. The average MU stock price target is $363.77, implying a 0.28% upside from the current price.
