“Today there is no AI without memory. AI systems need more memory. They need higher performance memory. They need lower power memory,” Mehrotra told Jim Cramer on “Mad Money.” “So, the value of memory, that equation has totally changed.”
His comments came in the shadow of a massive semiconductor fabrication site under construction near Micron’s headquarters in Boise, Idaho, part of the company’s planned $250 billion investment in U.S. manufacturing and research. The Boise site alone will eventually include two fabs, each roughly the size of 10 football fields; a single fab will have enough steel rebar to circle Earth twice, according to Mehrotra. The first Boise fab is expected to begin producing wafers in mid-2027. The scale of that investment reflects how dramatically Mehrotra thinks AI has altered the outlook for memory.
Memory has historically been a cyclical business, with periods of strong demand encouraging manufacturers to add capacity, only for excess supply to eventually drive down prices. However, Mehrotra — an engineer by trade who’s worked in the chip industry for over 40 years and previously co-founded SanDisk — said AI is creating a more durable source of demand.
The opportunity extends beyond data centers, he said. Mehrotra said he expects autonomous vehicles, robots, and AI-enabled consumer devices to require increasingly large amounts of memory in the years ahead.
“Memory today is essential,” Mehrotra said. “That’s why I call it the strategic infrastructure of the AI era.”
That demand is also changing the value customers place on memory, according to Mehrotra. Instead of customers simply soliciting bids and buying from whichever supplier offers the lowest price, he said memory must increasingly be designed alongside the processors and systems in which it will operate. Mehrotra said that makes memory essential to the performance of the broader system rather than simply another component.
“We are working closely with them earlier and earlier in their development cycle,” he said. “Our customers recognize the value of memory, because memory is what is enabling them to design products that are driving growth engines for them.”
He said Micron still can’t produce enough to satisfy that demand.
“All our customers across our end markets will buy everything that we make,” Mehrotra said, adding that data-center customers currently want roughly 50% more supply than Micron is able to commit.
The memory maker is gaining greater visibility into that demand through long-term customer agreements, another important shift for a business historically exposed to swings in the spot market. During the company’s most recent earnings call in late June, Micron announced that it had signed five-year strategic agreements with 16 customers. Mehrotra said the company has since inked additional deals.
“They have committed to taking the supply,” Mehrotra said. “So, this gives us assurance of demand.”
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