Micron is one of the largest memory manufacturers, and in both the AI and consumer segments, the company has managed to dominate with its industry-leading offerings. With the AI sector gobbling up DRAM modules, there's a sentiment that somehow, memory suppliers are responsible to the situation, and to address this thought, we sat down with Micron's VP of Marketing, Mobile and Client Business Unit, Christopher Moore, to know about the memory shortages.
Micron's VP Talks About How Memory Shortages Won't Improve Before 2028, Despite Massive Investments
Our discussion with Moore centered on how Micron is expanding its production capacities and what kind of impact we can expect from the consumer and AI segments moving forward.
Micron & the Consumer Memory Segment: The Untold Story
Our first question to Moore directly targeted user sentiment regarding current memory shortages, especially since the backlash against Micron is significantly higher than that of other suppliers, primarily due to the company's exit from its 'Crucial' consumer business. We asked Moore about whether memory suppliers are inclined towards catering to the AI sector, leaving consumers behind, and here's what he had to say:
Well, first I would want to try to help everybody understand that the perception may not be exactly correct, at least from our point of view. So I would never want to tell someone what to think or that they're wrong, but our viewpoint is that we are trying to help consumers around the world. We're just doing it through different channels. We still have a very sizable business in the client and mobile markets. We are also, of course, servicing our data center customers.
And what's going on right now is that the TAM and data center is growing just absolutely tremendously. And we want to make sure that, as a company, we help fulfill that TAM as well.
Micron says that its OEM consumer channel accounts for a large portion of the company's market share, and for those unaware of what this means, the company supplies modules like LPDDR5 directly to integrators like Dell, ASUS, and others, and then those manufacturers later repackage these memory modules into their own reference designs. Moore claims that while the exit with Crucial created an image that Micron is 'ditching' consumers, in reality, the US-based manufacturer still holds a large portion of the consumer supply chain through the OEM model.
Image Source: Micron
Moore says that Micron is in contact with every single PC brand out there to supply memory modules, but the company cannot ignore the demand coming from AI right now. The primary reason Micron and others are drawn to the AI industry is that the total addressable market (TAM) for DRAM manufacturers has expanded at a rapid pace, and as a business, Micron cannot afford to ignore the growing demand from this sector.
What's happening now is that all these data center build outs are going on, and the TAM of the enterprise or data center business is growing what used to be 30, 35%, and then to 40%, and now to 50% and 60% of the overall market is requiring more bits than what used to happen. And the entire industry is short. So I think that's something for people to understand.
This is not a Micron issue, it's an industry issue, where us and our peers or our competitors are all rushing to service these segments as much as we can, and there's just not enough supply to go around. It's a really unfortunate situation. But I think it's really important for people to understand we are still servicing the consumer market.
Image Credits: AMD
In our conversation with Moore, he emphasized that AI is too significant to ignore, but at the same time, Micron is doing its best to cater to consumer demand. Unfortunately, the sudden surge in DRAM demand has led to a shortage, leaving firms like Micron little time to adjust their supply lines. And this led to our second biggest question, which is whether consumers should expect Fab buildouts to help alleviate memory shortages. To answer that, Moore created an amazing background context, which we'll discuss next.
Micron: Why Fab Buildout Won't Rescue Us Anytime Soon From Memory Shortages
When we talk about capacity buildout, it isn't just placing new machines into the supply chain and thinking that it will increase DRAM output. Micron claims that the biggest concern right now when it comes to shortages is the fact that they need to find a solution for density variety of memory modules, which in simple words means that if Apple wants 8 GB, 12 GB, and 16 GB modules altogether, Micron would need to switch machines to cater to the output, which leads to a drop in production figures. Before AI, suppliers had few options but to cater to requests; however, the dynamics have changed now.
Because you can imagine if you've got a fab running with a bunch of different machines for one piece of silicon, and then you have to stop those machines and get it to run on another piece of silicon, you're gonna get less output. It's just, and it's not as simple as that, but that's the best way that I can explain it. What we're doing now is trying to run as few pieces of silicon as possible to max out, few differentiated DIDs as possible to max out the output, okay? And so we're working with our customers.
We're saying, you know, I know you used to wanna go from 12 gigabyte to 16 gigabyte, or 16 gigabyte to 24 gigabyte. Those changes actually drop our output. So we're working with them to try and get our demand as steady as possible so that we can get our supply as steady as possible and maximize the output.
This clearly verifies our previous reports, in which we discussed how laptop and smartphone manufacturers are now looking to limit memory configurations. For Micron, this is the best solution in the short term to ensure consistent production yield rates. And more importantly, with the AI frenzy, the need to switch from one DRAM generation is greater than ever, considering the compute requirements from customers. This means that for Micron, adjusting new equipment and production mechanisms has become more frequent.
Moore eventually told us that Micron's fab expansion plans won't bring in any meaningful effects until 2028, given that the buildout and customer certifications require a lot of time, and with the perfection AI customers demand in terms of technology and yield rates, setting up new fabs has become a much more extensive process.
You're right. That are coming out. But your question is incredibly insightful because in order to dramatically increase the number of bits we need more clean room space. And that takes a lot of time. So we broke ground in Idaho in our ID1 facility three years ago. And that's gonna come online in mid-2027.
We pulled that, it was end of 2027. We pulled it into mid-2027. But you're not really gonna see real output, meaningful output by the time we get all the qualification done and customers are accepting it and you get the tools, everything up and running until 2028.
Memory manufacturers are scrambling in to build newer production lines, yet constraints of the process eventually forces them to push the timelines ahead by several quarters, which means that for the average consumer, the DRAM shortages could persist for quite some time now, or at least until the AI demand starts to fade away.
Micron & China: Does the Manufacturer Feel the Heat From Competition With the Likes of CXMT?
The narrative of Chinese memory suppliers filling the gap in the memory segment has seen a significant rise in the past few weeks, mainly since China's CXMT has been stepping up with its DDR5 solutions and intentions of a mega-IPO. CXMT is known to be the world's fourth-largest DRAM manufacturer, and the firm is reportedly equipped with sufficient resources to expand its DRAM output. This is why it was reported that HP could integrate CXMT's memory modules into its consumer products.
We asked Moore whether Micron sees Chinese suppliers taking the company's share in the consumer segment, and while we didn't name a specific supplier, Moore did claim that his company welcomes competition, whether it comes from any part of the world.
The local supply in China has been coming on for quite a few years. And they do a great job. They do a great job of servicing the markets that they go after.
They go after not every market, but they've done a great job. And my view is competition makes us stronger. My view's always been that way. And if we see competition, it's something for us to step up and meet and get better. And so, yes, I welcome competition from any region. It doesn't matter where it comes from. And it just makes us better as a company. And it helps us service our customers better.
Conclusion: Micron's Statements Clearly Indicates That There's a Long Road Ahead With Memory Shortages
Our talk with Micron focused on key points around memory shortages, especially when you consider the consumer angle, and based on what we discussed, it would be safe to conclude that DRAM shortages aren't going anytime soon. And with that, both suppliers, OEMs and other elements in the supply chain are in a state of desperation, with little options left for them.
Image Credits: Micron
Like all suppliers, Micron is focusing on fab buildout, DRAM process advancements, and supply chain measures to ensure a consistent supply, yet the 'fruit' of these efforts will take a long time, before the general public sees them.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel.
Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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