Sanjay Mehrotra, CEO of Micron Technology, recently articulated this profound shift during an interview on CNBC's "Squawk on the Street," where he discussed the company's robust fiscal third-quarter results and its strategic positioning within the AI ecosystem, highlighting memory's indispensable role in this data-intensive era.
Micron’s latest earnings report underscored the profound impact of AI demand. Mehrotra highlighted an "exceptional record quarter with 9.3 billion dollars in revenue, a 15% sequential growth driven by of course AI." This surge was particularly evident in their data center segment, where revenue "doubled on a year-over-year basis," and in High Bandwidth Memory (HBM), which saw a "50% sequential" increase. HBM, he emphasized, is a "critical enabler for AI systems," already operating at an annualized run rate exceeding $6 billion, with strong demand projected through fiscal year 2026. This performance signals a significant pivot from the traditional cyclical nature of the memory market, propelled by unprecedented AI-driven requirements.
At the heart of this growth lies Micron's technical leadership and manufacturing prowess. Mehrotra proudly displayed a minuscule HBM4 chip, describing it as "a technical marvel." This next-generation memory, featuring up to twelve layers of stacked memory chips with an integrated logic chip, is pivotal for powering increasingly complex generative AI models. Its superior performance, massive bandwidth, and low power requirements are essential for both training and inference applications, from large language models to intricate chain-of-reasoning systems, ensuring that Micron remains at the forefront of this technological wave.
Memory is the indispensable foundation for AI.
The CEO further elaborated on AI's pervasive influence, noting its expansion from data centers to the very edge of the network, encompassing smartphones, PCs, and even autonomous vehicles and robotaxis. While traditional PC and smartphone unit sales might see modest low single-digit growth in the coming year, the critical factor for Micron is the dramatically increasing memory content required per device. This content growth, projected to be in the "mid-teens percentage growth in terms of the bit requirements for DRAM as we look ahead," effectively mitigates the impact of unit volume fluctuations. This strategic shift in product portfolio towards higher-value solutions, coupled with Micron's "manufacturing excellence" and "fourth successive generation of technology leadership," positions the company to navigate market cycles with greater resilience.
Mehrotra asserted that Micron has "transformed" itself, becoming a more "agile and adaptive company" capable of delivering sustained growth, even acknowledging that market cycles will persist. The company is actively working with customers on their 2026 plans, having already sold out of its HBM for calendar year 2025.
