tech
Micron CEO: Customers driving hard bargain on price contributed to memory shortage
Micron CEO Sanjay Mehrotra said years of aggressive pricing pressure left the memory industry underinvested, contributing to today's supply shortages.
TL;DR
- Micron CEO Sanjay Mehrotra blames customer price negotiations for contributing to the current memory chip supply shortage.
- Aggressive pricing in prior years led to underinvestment in the memory chip industry, hindering capacity expansion.
- The memory chip industry experienced negative gross margins in 2023 due to collapsing prices.
- AI-driven demand has accelerated, exacerbating the supply crunch.
- The shortage is projected to last beyond 2027, with new semiconductor plants taking years to build.
- Micron is investing approximately $200 billion in manufacturing and R&D, including new fabs in Boise, Idaho, and Syracuse, New York.
- The shortage is causing price increases in consumer electronics, as seen with recent Apple Mac and iPad model price hikes.