TLDR
- Micron Technology is investing $200 billion in U.S. manufacturing expansion, including a $50 billion project in Boise and $100 billion near Syracuse, to address the worst memory chip shortage in over 40 years driven by AI demand.
- The company’s gross margins have surged from 18.5% in early 2024 to 56% in Q4 2025, with expectations to hit 68% this quarter as it shifts focus to high-bandwidth memory chips for AI data centers.
- Micron can only meet half to two-thirds of current customer demand for key products, with buyers now seeking multi-year contracts to secure supply and avoid price spikes.
- DRAM contract prices have jumped more than 170% over the past year, while DDR5 memory chips have seen nearly 500% price increases since September 2024.
- MU stock has climbed 44% year-to-date and risen more than sixfold since April 2024, reaching around $414 per share, making the company worth nearly half a trillion dollars.
Micron Technology can’t build factories fast enough.
The Boise-based memory chip maker is racing to expand production as artificial intelligence systems create unprecedented demand for its products. The company is spending $200 billion across multiple U.S. sites to break what executives call the worst supply crunch the industry has seen in more than four decades.
In Boise, engineers detonate controlled explosions each afternoon around 4:30 to blast through basalt bedrock. They’re clearing ground for two new chip factories that will cost $50 billion combined. The first plant starts producing silicon wafers in mid-2027, with both facilities running by late 2028.
Each factory spans 600,000 square feet. That’s more than 10 football fields of clean room space.
Workers have already detonated over 7 million pounds of dynamite to prepare the site. Construction teams work around the clock from a small city of trailers.
Production Ramp-Up Across Multiple States
Near Syracuse, Micron broke ground on a $100 billion factory complex. It’s New York’s largest private investment ever.
The company also announced a $9.6 billion facility in Hiroshima, Japan last year. Competitor SK Hynix revealed plans for a $13 billion plant in South Korea plus a $4 billion Indiana complex in January.
The building boom stems directly from AI’s explosive growth. Large language models need far more memory than previous technology generations.
Processors from Nvidia, Google, Broadcom and AMD all require faster memory chips for training models and running inference queries. Companies like OpenAI, Oracle, xAI and Anthropic have announced data center projects worth trillions of dollars.
Scott Gatzemeier leads Micron’s U.S. expansion. He’s worked at the company for 28 years.
“I’ve never seen anything so disruptive as AI,” Gatzemeier said. “As we started to transfer from training to inference, the amount of data required just exploded.”
The company realized it lacked enough clean room capacity to meet demand. Memory went from commodity product to strategic bottleneck.
MU shares rose more than sixfold since April 2024 to around $414. The stock climbed 44% year-to-date, giving Micron a market value near half a trillion dollars.
Profit Margins Approach Nvidia Levels
Gross margins tell the transformation story. Micron’s margins stood at 18.5% in early 2024.
They hit 56% in the most recent quarter. The company expects margins to reach 68% this quarter.
That approaches Nvidia’s 73% gross margin on its flagship GPUs. Memory chips were cheap commodity products for decades.
CFO Mark Murphy spoke at an investor conference Wednesday. He said Micron can only meet half to two-thirds of demand for some key customers.
Buyers now approach the company seeking multi-year purchasing contracts. They want guaranteed supply and protection from dramatic price increases.
“On the supply side, we are doing everything we can to add capacity,” Murphy said. “But there is no easy or fast way to get that done.”
Taiwan’s Commercial Times reported DRAM contract prices rose over 170% in the past year. DDR5 chips saw even steeper increases.
Circular Technology resells data center hardware in Massachusetts. The company says DDR5 prices jumped nearly 500% since September.
“We’re nowhere near the end of the shortage,” said Brad Gastwirth, Circular’s head of global research. “I think it lasts through the end of 2026 and at least the first half of 2027.”
Between August and October, major AI developers and cloud companies announced massive projects. Micron noticed high-bandwidth memory demand surging.
The company accelerated construction on ID2, its second Boise factory. Chief business officer Sumit Sadana said memory transformed from system component to strategic asset.
Micron owns a smaller market share than SK Hynix. That makes it vulnerable to competitive concerns.
In early February, research firm SemiAnalysis reported Micron’s HBM4 chips failed to win supplier spots for Nvidia’s Vera Rubin servers launching this year. The report suggested Nvidia was unhappy with data transmission speeds.
MU stock briefly dropped on the news. Nvidia declined to comment.
Sadana called the reports inaccurate. He said Micron is already shipping HBM4 chips and expects to ship more next quarter.
Supplies of HBM4 and HBM3e are sold out through the end of this year.
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