AI has upended the memory economy: Micron CEO announces a structural shift
Micron CEO Sanjay Mehrotra stated that the era of artificial intelligence has permanently changed the fundamental principles of the memory market. According to him, memory has transformed from a cyclical commodity into a strategic resource, and the industry has entered a phase of sustainable growth unseen before.
Speaking at the site of a new semiconductor plant in Boise, Idaho, Mehrotra emphasized that the traditional "boom-bust" cycles that defined the sector's dynamics for decades are becoming a thing of the past. Micron is already investing $250 billion in expanding production capacity and R&D in the United States, building two new facilities as part of this strategy.
Memory as AI Infrastructure
Mehrotra's key thesis is that artificial intelligence has created a fundamentally different nature of demand. Customers no longer choose a supplier solely by price, as was the case with ordinary commodities. Now, memory chips are tailored to specific processors and server architectures, and the performance of the entire system directly depends on the quality and characteristics of the memory.
"That's why I call memory the strategic infrastructure of the AI era," he stated. "Today, it's impossible to imagine AI without memory. AI-based systems require more and more memory."
Numbers Confirm the Shift
Micron's financial results fully confirm this thesis. Revenue for the third fiscal quarter soared to $41.46 billion, compared to $9.30 billion in the same period a year earlier. Gross margin reached 84.6%, up from 37.7% last year, and in the fourth quarter the company expects to reach around 86%.
The main challenge now is production capacity. Mehrotra admitted that factories cannot keep up with customer demand: data centers alone require approximately 50% more chips than Micron is capable of producing. In the future, demand will only grow—among promising buyers, the company's head named manufacturers of autonomous vehicles, robots, and AI-powered household appliances.
Risks and an Alternative View
However, not everyone shares this optimism. In June, a class-action lawsuit was filed against Micron, Samsung, and SK Hynix: plaintiffs accuse the manufacturers of collusion and artificially inflating DRAM memory prices. Chinese companies, including CXMT, are also ramping up production, which could bring back the harsh price competition—the very thing that, according to Mehrotra, the industry has moved away from thanks to AI.
My expert take: Mehrotra's statements are not just corporate optimism but a reflection of a real structural shift. AI is indeed turning memory into a critical resource comparable to energy commodities. But history teaches us: high margins always attract new players and provoke overproduction. The question is not whether cyclicality will return, but when exactly and how hard it will hit the market.