Micron predicts a memory chip shortfall beyond 2026
Nvidia Corp supplier Micron Technology Inc stated that an ongoing memory chip shortage has intensified over the past quarter and emphasized that the crunch will extend beyond this year due to a surge in demand for high-end semiconductors necessary for AI infrastructure. “The shortage we are seeing is really unprecedented,” stated Manish Bhatia during an interview shortly after the chipmaker conducted a groundbreaking ceremony for a $100 billion production site outside Syracuse, New York, on Friday, reinforcing a similar forecast the company issued in December. “High-bandwidth memory required to make artificial intelligence accelerators is consuming so much of the available capacity across the industry that it’s leaving a tremendous shortage for the conventional side of the industry, for phones or PCs,” Bhatia said. He stated that PC and smartphone manufacturers have lined up to secure memory chips following 2026.
On Friday, it is reported that major Chinese smartphone makers, including Xiaomi Corp., Oppo, and Shenzhen Transsion Holdings Co., are adjusting their shipment targets for 2026 in response to increasing memory costs, with Oppo reducing its forecast by as much as 20 percent. None of the three provided a response to the requests for comment. According to industry tracker, global smartphone shipments are projected to decline by 2.1 percent next year due to a shortage of memory chips, which is driving up costs and constraining production. PC manufacturers such as Dell Technologies Inc. have issued warnings that they are expected to be impacted by the continuing shortage. The leading trio of the global memory chip sector — Micron, SK Hynix Inc., and Samsung Electronics Co — experienced a significant rise in their share prices in 2025, driven by the AI boom. SK Hynix announced that it has sold out its entire chip slate for 2026, while Micron reported that its AI memory semiconductors are fully booked for this year.
In December, Micron announced its decision to cease its well-known Crucial-branded consumer memory business in order to prioritize the supply of strategic enterprise customers, including Nvidia. The AI industry’s relentless demand for memory chips is driving Micron to expedite its manufacturing expansion efforts in both the US and Asia. On Saturday, Micron revealed intentions to invest $1.8 billion in a site featuring an existing plant in Taiwan, a crucial production hub for the Boise, Idaho-based chipmaker. The decision notably reduces the timeframe for Micron to launch a new factory. The company has announced that it will commence significant production of DRAM wafers in the latter half of 2027. DRAM serves as the operating environment for sophisticated processors from Nvidia and Intel Corp., facilitating calculations and forming the core of the high-bandwidth memory essential for AI accelerators to function at their best.
“What we’ll be doing at our Asian sites is continuing to transition to the next generation of technology,” Bhatia stated in the interview on Friday. He added that new wafer capacity will take place almost entirely in the US. Micron’s $100 billion project near Syracuse is set to feature four DRAM fabs — each approximately the size of 10 football fields. The initial wafers are set to emerge from the production lines by 2030. The US chipmaker is expanding its operations by adding two fabs in Boise, complementing its existing research and development facilities in the area. The initial Idaho fab is set to commence production in 2027, with plans for a second factory also underway. The plans reflect the company’s dedication to relocating 40 per cent of its DRAM manufacturing to the United States, a target made possible by a $6.2 billion Chips Act award secured in 2024, along with access to a current 35 per cent tax credit during the construction phase.
