Micron shares sank about 6 per cent on Thursday as the chipmaker's plan to boost capital outlay unnerved investors, taking the shine off another round of blockbuster quarterly earnings fuelled by AI.
Demand for advanced memory chips has soared as US tech giants pour billions into AI data-centre buildouts, driving a supply crunch and pushing prices higher. That helped Micron deliver record margins in the quarter ended February.
But the company plans to increase its fiscal 2026 capital expenditure plan by $5 billion to meet booming demand, taking the total investment for the year to more than $25 billion and said spending would rise further in 2027.
The increased expenditure reflects higher spending on controlled manufacturing spaces and increased outlays for new production equipment as the company prepares for high-volume manufacturing and dynamic random-access memory investments.
Most of the spending increase comes from expansion work at its site in Tongluo, Taiwan, with additional cost pressure arising from higher construction spending at its US fabrication projects.
Construction-related spending is set to rise by more than $10 billion from a year earlier, the company said. — Reuters
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