[Digital Today reporter Jinju Hong] Micron CEO Sanjay Mehrotra (산제이 메흐로트라) said the spread of artificial intelligence is fundamentally changing the memory industry’s business structure.

CNBC reported on Aug. 20 that Mehrotra said memory is becoming core infrastructure in the AI era, changing the old industry formula that was heavily shaken by prices and oversupply.

Memory chips have long been classified as a typical cyclical industry, in which companies expand capacity when demand rises and prices later fall due to oversupply. Mehrotra said AI is creating a more sustained demand base. “There is no AI without memory today,” he said, adding that AI systems require more memory, higher performance and lower-power memory. He said the value equation for memory “has completely changed.”

Micron plans to invest a total of $250 billion in U.S. production and research based on this view. A large semiconductor production facility is being built near Boise, Idaho, where the company is headquartered. The Boise site is expected to eventually house 2 fabs, and the first fab is expected to begin wafer production in mid-2027.

Datacentres are at the centre of shifting demand. Mehrotra said current datacentre customers want about 50 percent more supply than Micron can actually commit to delivering. “Everything we make will be bought by customers in all end markets,” he said. That implies current production capacity is not enough to fully keep up with market demand.

He also stressed that AI demand is not limited to datacentres. Mehrotra forecast that memory content will continue to increase in autonomous vehicles, robots and consumer devices equipped with AI functions. “Memory is essential today,” he said, calling it “strategic infrastructure for the AI era.”

He said the way customers evaluate memory is also changing. In the past, customers often asked multiple suppliers for prices and bought the cheapest products, but now memory is increasingly reviewed together with processors from the early stages of system design. Mehrotra said Micron is working more closely with customers from early in their development cycles, and customers see memory not as a simple component but as a key factor in product performance and growth.

He said the changes are also being reflected in contract structures. Micron said in its recent earnings release at the end of June that it had signed 5-year strategic contracts with 16 customers. Mehrotra said it has since signed additional contracts. He said customers have committed to take agreed volumes, and such contracts provide the company with demand certainty.

The changes Micron highlights appear less about a simple improvement in business conditions and more about shifts in demand structure and trading practices. As the spread of AI elevates memory into a core component of system performance, the memory industry, once heavily exposed to spot-market volatility, is showing a trend of being reshaped around long-term supply contracts and early design collaboration. How much actual production capacity expansion can keep up with this demand is expected to be a key point to watch for the industry.