Original author: Li Jia

Original source: Wall Street Whisper

“The AI competition is not only a competition for computing power but also a competition for storage.” Micron Technology CEO Sanjay Mehrotra made this judgment.

In a rare in-depth interview recorded at home on the podcast "A Bit Personal" on June 5, Sanjay shared insights not only about industry viewpoints but also touched on his personal experiences, family influences, and career choices.

AI is still in its very early stages, which is one of Sanjay's core judgments.

According to him, as large models, Agent AI, and inference applications continue to evolve, AI needs not only stronger computing power but also stronger "memory capabilities."

A longer context window, larger model scale, and increasing token consumption are all driving the continuous rise in storage demand.

The essence of AI is data, and data cannot be separated from storage; therefore, storage will become one of the most important infrastructures in the enhancement of AI capabilities.

Meanwhile, the supply side is not adequately prepared. Sanjay pointed out that the current storage industry is facing structural supply constraints rather than short-term supply-demand mismatches. Advanced storage products require more wafers, and building new wafer fabs often takes three to four years, making subsequent capacity ramp-up similarly lengthy.

More importantly, as technological nodes advance, the rate of storage capacity output per wafer is declining. He predicts that the industry's state of tight supply is expected to last until after 2026.

When explaining why storage technology has long been underestimated, Sanjay candidly stated: “People often misunderstand memory and do not realize how difficult it is to manufacture memory.” From physics, chemistry, to materials science, ensuring that each of the trillions of bits behaves correctly during mass production involves extremely high technical difficulty. He believes that the AI competition is also a storage competition, which has long been overlooked by the market.

From a longer-term perspective, Sanjay believes that the underlying logic of success for companies and individuals has not changed. Whether promoting a $200 billion investment plan or leading Micron through the storage industry cycles, the keywords he repeatedly emphasizes are resilience, discipline, and long-termism. Investment must be based on data and fundamentals, and leaders need to recognize industry trends while deeply understanding technical details.

As he learned from his father, success requires both the resilience to persevere and the ability to seize opportunities at critical moments.

Core viewpoints from Micron Technology CEO Sanjay Mehrotra's interview are as follows:

Storage is the underlying bottleneck that AI has underestimated, with its manufacturing difficulty and strategic value far exceeding market perception. AI is transforming from a "competition of computing power" to a "competition of storage." The expansion of model scale, longer context windows, and surging token consumption mean that AI relies not only on stronger computing power but also on stronger "memory capabilities." Without sufficient storage capacity and bandwidth, no amount of computing power can be unleashed.

The structural constraints on the supply side mean that the storage shortage is not a short-term fluctuation, but a long-term state. Advanced storage products consume more wafers, while building new wafer fabs takes three to four years; the capacity ramp-up is similarly long. Meanwhile, the advancement of technological nodes leads to declining output increments from each wafer. Under the mismatched supply-demand dynamics, supply tightness is expected to persist at least until after 2026.

People always underestimate the difficulty of manufacturing memory, but this is precisely the industry's deepest moat. From physics, chemistry, to materials science, ensuring that trillions of bits are error-free in design and mass production encompasses extremely high engineering complexity. The difficulty of manufacturing storage chips is on par with any semiconductor field, and in many respects, even more challenging.

Success comes from resilience, discipline, and long-termism, rather than short-term speculative judgments. Whether promoting the $200 billion investment or navigating cyclical fluctuations in the storage industry, leaders need to be clear about industry trends and delve into technical details. Just as his father did not give up after being refused a visa three times, success requires both resilience to persist and the ability to seize opportunities at critical moments.

Storage is Becoming the Backbone of AI

When discussing the current historical position of the storage industry, Sanjay candidly stated, “I have been in this industry for over 45 years. This is the most exciting time I have experienced in the entire industry.”

He further elaborated on the strategic significance of storage for AI:

“Without semiconductors, there is no AI. And storage is the backbone of AI, the key foundation that supports the continuous evolution of AI.”

In his view, the role of storage has evolved from merely being a component in devices to directly bearing the "intelligence" itself: “Today, storage is not just enabling devices to run; it is supporting the 'intelligence' within AI itself, helping artificial intelligence become smarter.”

As model sizes expand, inference demands explode, and Agent AI rises rapidly, the logic for the growth of storage demand is very clear to Sanjay: “As models get larger, as inference demands continue to grow, AI transitions from training to inference, from data centers to the edge, and the demand for storage will only increase—it needs greater capacity, higher performance, and lower power consumption.”

He also specifically mentioned the reliance of token economics on storage: “When you look at token economics, it heavily depends on storage as well. As token usage grows, context windows become longer, KV cache demand increases, the models themselves are becoming larger, AI needs not just computational power but also the ability to 'remember.'

Supply Tightness Will Last Until After 2026

Regarding the supply-demand issues most concerning to the market, Sanjay provided a clear judgment: Overall industry supply tightness will persist until after 2026, and will last for quite some time.

He explained the structural constraints on the supply side: “Building a wafer fab takes a long time. From breaking ground to the first batch of wafers being produced usually takes three to four years. After that, it's necessary to continue to ramp up production gradually.”

More critically, rising technical difficulties are compressing the output efficiency of individual wafers: “The production efficiency improvement brought by each new generation of technology—the bit increment that each wafer can produce—is decreasing.”

Sanjay revealed that Micron had anticipated this trend as early as around 2021.

At that time, high-bandwidth memory (HBM) accounted for less than 1% of the entire storage industry, but they observed that future generations of HBM would consume a large number of die and significantly impact the supply landscape: “So as early as 2021, we said that the industry needed to build new fabs from scratch. No one really predicted that AI would explode at such a rapid pace.”

Regarding the market's concern about “oversupply after supply catches up,” Sanjay did not directly dismiss it, but emphasized that AI is still in its early stages, and the long-term structural growth on the demand side is the basis of his confidence: “From the demand side, this is still in a very, very early stage. We believe AI has a long way to go.”

The Underlying Logic of the $200 Billion Investment: Discipline

Micron's announcement of a $200 billion investment in the U.S. domestic storage manufacturing system is one of the most attention-grabbing capital decisions in the semiconductor industry in recent years. Regarding the underlying logic of this decision, Sanjay repeatedly emphasized the word "discipline":

“Investments are not made blindly; they must be disciplined and based on data. You need to understand the technology, understand the applications, and understand where these applications are headed. You also need to work closely with customers to understand where they are going in the future and what role Micron will play in that.”

He further explained the discipline at the execution level: “Today, we are investing in building a series of new fabs from scratch. The first step is to build the facilities and infrastructure. Once these facilities are completed, when we are installing equipment and forming actual production capacity, we will still maintain discipline—continuously evaluating demand forecasts, assessing how much growth technological advances can bring, and evaluating how product demand will change.”

When asked if he ever experienced self-doubt, Sanjay's answer was straightforward:

“We have no self-doubt. We absolutely believe in the opportunities in storage; today, this has become very clear. Of course, in our business, it is always important to maintain adaptability and agility.”

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