On Wednesday, Micron Technology Inc. (NASDAQ:MU) CEO Sanjay Mehrotra warned that the memory industry may struggle to keep pace with surging artificial intelligence demand for years, citing structural supply constraints that are limiting the sector’s ability to expand production.
AI-Driven Memory Demand Continues To Outpace Supply
Speaking during Micron’s fiscal third-quarter 2026 earnings call, Mehrotra said customers increasingly recognize that shortages in memory and storage products will take significant time to ease.
“Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand,” he said.
According to Mehrotra, the industry’s ability to add capacity depends on large-scale greenfield semiconductor fabs that are expensive, complex and time-consuming to build.
“The pace is constrained by several factors,” Mehrotra said, noting long construction timelines, labor shortages, regulatory hurdles and growing energy infrastructure requirements.
HBM Growth Adds Pressure To Global Memory Supply
The Micron chief executive also highlighted the increasing complexity of memory manufacturing, particularly as advanced technologies such as High Bandwidth Memory, or HBM, become critical components in AI systems.
Mehrotra said every major AI computing platform — whether powered by GPUs, CPUs or custom AI accelerators — relies heavily on memory performance and capacity.
As a result, memory has evolved from a supporting component into what he described as a “strategic asset” within the AI ecosystem.
He added that growing HBM adoption is putting additional pressure on the conventional memory supply because advanced memory products require more manufacturing resources and capacity.
In NAND flash memory, Mehrotra said some suppliers are reallocating cleanroom space toward DRAM production, further constraining NAND supply growth.
Micron Signs 16 Strategic Customer Agreements
Against that backdrop, Mehrotra said customers are increasingly seeking long-term supply assurances to support their future product road maps.
Micron announced it has completed 16 Strategic Customer Agreements, or SCAs, spanning data center, consumer and automotive markets.
Micron Beats On Revenue, Earnings And Guidance
Micron topped Wall Street expectations in the third quarter, reporting $41.46 billion in revenue and adjusted earnings of $25.11 per share, ahead of analyst estimates of $35.59 billion and $20.63 per share, respectively.
Revenue jumped 346% year over year.
For the fourth quarter, the company forecast $50 billion in revenue, plus or minus $1 billion, and adjusted earnings of $31 per share, plus or minus $1, both above consensus estimates of $42.95 billion and $25.50 per share.
Micron also declared a quarterly dividend of 15 cents per share, payable July 21 to shareholders of record on July 6.
Price Action: Micron shares closed down 0.31% at $1,048.51 on Wednesday but surged 15.78% to $1,213.96 in after-hours trading, according to Benzinga Pro.
According to Benzinga Edge Rankings, Micron ranks in the 99th percentile for Momentum, driven by strong performance across short, medium and long-term periods.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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