Memory chips by South Korean semiconductor supplier SK Hynix are seen on a circuit board of a computer in this illustration picture taken February 25, 2022. REUTERS/Florence Lo/Illustration/File Photo
NEW YORK: Nvidia Corp supplier Micron Technology Inc says an ongoing memory chip shortage has accelerated over the past quarter and reiterated that the crunch will last beyond this year due to a surge in demand for high-end semiconductors required for artificial intelligence (AI) infrastructure.
“The shortage we are seeing is really unprecedented,” Micron executive vice-president of Operations Manish Bhatia said in an interview shortly after the chipmaker held a groundbreaking ceremony for a US$100bil production site outside Syracuse, New York, last Friday, amplifying a similar forecast the company provided in December.
High-bandwidth memory required to make AI 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 personal computers (PCs),” Bhatia said.
He added that PC and smartphone makers have joined the queue to try to lock up memory chips after 2026.
Chinese media outlet Jiemian reported last Friday that major Chinese smartphone makers, including Xiaomi Corp, Oppo and Shenzhen Transsion Holdings Co, were trimming their shipment targets for 2026 due to rising memory costs, with Oppo cutting its forecast by as much as 20%.
All three did not respond to requests for comment.
Global smartphone shipments may decline 2.1% this year as a shortage of memory chips drives up costs and squeezes production, industry tracker Counterpoint Research estimated in December.
PC makers, including Dell Technologies Inc, have also warned they are likely to be affected by the ongoing shortage.
The big three of the global memory chip industry – Micron, SK Hynix Inc and Samsung Electronics Co – saw their share prices surge in 2025 thanks to the AI boom.
SK Hynix said it has sold out its entire chip slate in 2026, while Micron has said its AI memory semiconductors are also fully booked this year.
To prioritise supplying strategic enterprise customers, including Nvidia, Micron said in December it will end its popular Crucial-branded consumer memory business.
The AI industry’s insatiable appetite for memory chips is also adding urgency to Micron’s manufacturing expansion in both the United States and Asia.
Micron announced plans, last Saturday, to pay US$1.8bil for a site with an existing manufacturing plant in Taiwan, which serves as a key production hub for the Boise, Idaho-based chipmaker.
That move significantly shortens the time for Micron to bring a new factory online. The company said it would start meaningful output of DRAM wafers in the second half of 2027.
DRAM provides the operating environment for complex processors from Nvidia and Intel Corp to make calculations and is at the heart of high-bandwidth memory required for AI accelerators to work optimally.
“What we’ll be doing at our Asian sites is continuing to transition to the next generation of technology,” Bhatia said during the Friday interview. — Bloomberg
