micron Chief Executive Officer Sanjay Mehrotra said on Tuesday that memory chip makers are not alone in the blame for the current supply-demand imbalance that has led to recent spikes in prices for smartphones, computers and other consumer electronics.
Mehrotra argued that in recent years, customers who have forced their way into price negotiations have also contributed to business pressures, indicating a lack of investment in the industry’s artificial intelligence boom.
“Prices have gone way down in our industry because of certain customers,” Mehrotra told Jim Cramer on CNBC’s “Mad Money” on Tuesday. “In 2023, prices have fallen by a third.”
The price collapse has pushed Micron and other memory suppliers into negative gross margins, leaving much of the industry without the financial flexibility to invest in new manufacturing capacity just as artificial intelligence-driven demand begins to accelerate, Mehrotra said. Micron’s gross profit margin fell to -7.3% in fiscal 2023, which ended in August, according to FactSet.
“Businesses were losing money. They couldn’t afford to pay,” he said. “It has had a huge impact on the industry’s ability to invest.”
Micron continued to invest during the recession, the CEO said. “Of course, these investments were significantly reduced compared to the previous year.” Micron’s fiscal 2023 capital expenditures were $7.7 billion, down from $12.1 billion in the previous year.
Since the price drop in 2023, the demand for AI-powered memory chips has steadily increased. This acceleration became more pronounced last year and boosted Micron’s financial performance. But 2026 raised the bar even further, making Micron one of the stock market’s biggest winners. The company’s stock price rose more than 240% in the second quarter, adding more than $920 billion to its market capitalization, giving Micron a market cap of about $1.3 trillion.
Mehrotra said supply shortages are likely to continue beyond 2027 because new semiconductor fabs take years to build and manufacturing next-generation memory has become significantly more complex. To close the gap, Micron is investing about $200 billion in manufacturing and research and development, including new memory plants in Boise, Idaho, and Syracuse, New York, Mehrotra said. The CEO said Boise’s project is the most advanced, with the first chips expected to be released “in the middle of next year” and ramping up from there. The Boise site will eventually include two plants.
The shortage is already being felt beyond the semiconductor industry. last week, apple The company raised prices on some Mac and iPad models after CEO Tim Cook said rising costs for memory and storage were “now inevitable,” highlighting how AI-driven demand is driving up component costs in consumer electronics.
