Micron surges on $24B Singapore fab bet as AI demand tightens
New wafer facility to boost NAND capacity amid fully allocated HBM supply through 2026
Micron Technology shares climbed on Tuesday after the memory chipmaker broke ground on a $24 billion advanced wafer fabrication facility in Singapore, a bold expansion move that comes as the company reports its entire 2026 high-bandwidth memory capacity has been fully allocated by customers racing to secure AI chip supplies.
The new facility, which will add 700,000 square feet of cleanroom space within Micron's existing NAND manufacturing complex, represents a planned investment of approximately $24 billion over the next decade. Production is scheduled to begin in the second half of 2028, with the plant focused on NAND flash memory chips used in solid-state drives that power data centers and AI applications.
The announcement marks the latest escalation in what analysts are calling a "memory supercycle," driven by explosive demand for artificial intelligence infrastructure. William Blair analyst Sebastien Naji initiated coverage of Micron with an "outperform" rating this week, forecasting that the company's HBM revenue will jump 164% in 2026 and an additional 40% in 2027.
"Aggregate industry supply is likely to remain substantially short of demand for the foreseeable future," said Sanjay Mehrotra, Micron's chief executive, in recent commentary on market conditions. The executive characterized the shortage as structural rather than cyclical, suggesting pricing power could extend well beyond 2026.
Micron's stock has surged more than 530% over the past 12 months, with shares currently trading around $389, near their 52-week high of $412.43. The Boise, Idaho-based company now commands a market capitalization of approximately $450 billion, reflecting investor optimism about its positioning in the AI chip market.
The Singapore expansion will create approximately 1,600 new jobs, primarily in fab engineering and operations, according to a statement from the company. The facility is part of a broader strategy to scale manufacturing capacity to meet what management describes as unprecedented demand for memory technologies that enable AI workloads.
Wall Street has grown increasingly bullish on Micron's prospects. The consensus analyst target price stands at $354.21, with 35 of the 41 analysts covering the stock rating it a buy or strong buy, according to market data. The company's financial performance has accelerated sharply, with quarterly earnings growing 175% year-over-year and revenue up 57% in the most recent period.
The strategic importance of Micron's position in the AI supply chain has become increasingly apparent. High-bandwidth memory, or HBM, is a critical component for AI processing, acting as the ultra-fast memory that sits directly alongside graphics processing units. The tight supply-demand imbalance has given memory manufacturers considerable pricing leverage, with analysts noting that Micron's adjusted earnings per share could rise more than 275% over the next two years.
However, some investors have expressed caution about the company's valuation. The stock currently trades at a trailing price-to-earnings ratio of 38.03, though the forward P/E of 12.63 suggests the market expects significant earnings growth. With a beta of 1.5, the stock remains more volatile than the broader market, a characteristic that has been on display during recent semiconductor sector swings.
The Singapore groundbreaking ceremony, attended by government officials and company executives, underscores the strategic importance of the city-state as a semiconductor manufacturing hub. The facility will expand Micron's NAND production capacity, complementing its DRAM and HBM operations in Idaho, Virginia, and other locations worldwide.
As the AI infrastructure build-out accelerates across cloud providers, enterprise data centers, and consumer applications, memory capacity has emerged as a potential bottleneck. Micron's $24 billion commitment represents a significant bet that demand for both traditional NAND and cutting-edge HBM will continue to outstrip supply through the end of the decade.