Shares of Micron Technology surged nearly 8% on January 16 after CEO Sanjay Mehrotra outlined an aggressive, multi-billion dollar U.S. expansion plan driven by soaring, sustained demand for memory chips from artificial intelligence systems. Mehrotra emphasized that AI-driven demand is "accelerating" and "real," pushing the industry into a multi-year growth phase fueled by data-center buildouts and advanced AI models.
The company is committing approximately $20 billion to expand its U.S. manufacturing footprint. This includes building two new fabrication plants in Idaho and a major 600,000-square-foot facility in Clay, New York, where roughly $10 billion will be deployed in the initial phase. Over the long term, Micron envisions a U.S. buildout that could eventually run into the hundreds of billions of dollars.
This expansion is a direct response to a severe global shortage of high-performance memory components, particularly DRAM and NAND used in AI servers and accelerators. Industry analysts now project average memory prices to jump by around 55% in Q1 2026. Mehrotra and financial commentator Jim Cramer both highlighted that the shortage stems from a lack of equipment to expand production quickly enough, not from a lack of demand. Cramer noted on CNBC that "We don't have enough equipment to expand production of these chips, and we can't put it together fast enough."
While the new facilities are years away from full operation, the near-term supply-demand imbalance is expected to persist. Micron's leadership believes constrained supply conditions will last through at least 2027. The company is pushing its existing plants to higher utilization to capture the current strong pricing environment. Other chip stocks like Western Digital and Seagate are also benefiting from this industry-wide crunch.
Cramer pointed out that Nvidia was uniquely positioned, having foreseen the demand surge and partnered with Taiwan Semiconductor to secure high-end chip production, avoiding the memory bottleneck. The broader market context shows equities, including the S&P 500 and Nasdaq, continuing to rise despite geopolitical tensions, with investors seemingly focused on the structural growth narrative in tech and AI.
