Memory chip stocks are surging due to an AI-driven supply crunch expected to last through 2028. Analysts project that AI data centers will consume roughly 70% of global memory chip production in 2026, with new fabrication capacity not coming online until late 2027 or 2028.
Micron CEO Sanjay Mehrotra confirmed new industry supply will not significantly ramp before 2028. The company and its competitors have locked in buyers with multi-year contracts, essentially pre-selling their output. This reluctance to invest in expensive new facilities is creating a longer, more sustainable market cycle.
AI workloads require massive amounts of high-bandwidth memory for large language models and training clusters, creating structurally different demand. This persistent undersupply gives producers like Micron, SK Hynix, and Samsung sustained pricing power. The key risk is whether AI spending growth remains sustainable at its current pace.