Tech Explained: Here’s a simplified explanation of the latest technology update around Tech Explained: AI Demand Ignites Storage Chip Market, Micron Technology Leads Sector Rally in Simple Termsand what it means for users..
At the close of U.S. stock trading on Friday, shares of leading storage chip company Micron Technology (MU) surged significantly once again, ending the day with a gain of over 7% and hitting a new all-time high. The company’s market capitalization subsequently broke through the $400 billion mark, surpassing that of Alibaba and Bank of America, and climbed to 25th place in the global ranking of listed companies by market value. This marks Micron Technology as one of the hottest stocks in the market.
Major Player Backing and Hundred-Billion Investment Groundbreaking
The immediate catalyst for the strong stock performance came from major investment news. On Friday, Micron Technology held a groundbreaking ceremony in Onondaga County, New York, USA, for its planned memory manufacturing complex, with an investment potential of up to $100 billion. The company confirmed that the project will involve the construction of up to four wafer fabrication plants. Once completed, it will become the largest semiconductor manufacturing facility in the United States and one of the world’s most advanced storage chip production bases. The facility is expected to commence operations in 2030, with production capacity gradually increasing over the following decade. Particularly noteworthy, in the announcement, several tech industry leaders collectively offered congratulations, including NVIDIA founder Jensen Huang, Apple CEO Tim Cook, Microsoft CEO Satya Nadella, Meta CEO Mark Zuckerberg, and AMD CEO Lisa Su. This fully highlights Micron Technology’s central role in today’s technology supply chain.
AI Demand Drives Storage Market Boom
The explosive rise in Micron Technology’s stock price is fundamentally driven by the artificial intelligence (AI) wave, which has sparked a surge in demand for storage chips, particularly high-bandwidth memory (HBM) chips. As a leading supplier of HBM chips, Micron’s products are widely used in hardware such as graphics processors that power AI applications. Strong market demand for its HBM chips, coupled with constrained capacity across the entire storage chip industry, has led to tight supply for various types of storage chips, including consumer-grade ones, thereby boosting the company’s sales, profit margins, and overall earnings. Over the past three months, Micron Technology’s stock price has accumulated a gain of 86%, and over the past year, it has soared by 245%.
Industry Outlook and Sector Correlation
Industry perspectives have further reinforced the market’s optimistic expectations. Divya Mathur, a portfolio manager at U.S. asset management firm ClearBridge Investments, noted that over the next decade, as AI continues to drive chip demand, the storage chip sector will be one of the best investment choices. He believes the market still underestimates the enormous demand for memory driven by AI and referenced the view that the storage industry might be in the “second year of a decade-long upcycle.” Additionally, in terms of valuations, some Asian storage chip companies remain relatively attractive. Bolstered by Micron Technology’s significant gains, U.S. storage-related stocks generally performed strongly on Friday. Shares of companies such as SanDisk Corp (SNDK), Seagate Technology (STX), and Rambus (RMBS) all recorded notable increases. Collectively, this paints a picture of robust growth for the storage chip industry in the AI era.