Micron CEO warns supply chain shortages could continue into 2023

Micron CEO Sanjay Mehrota warned that while the semiconductor industry has started to see improvements as it works to help address supply chain shortages, those challenges could likely stick around into 2023. 

"During COVID, the demand for learn from home, PCs, work from home, all the data center services, cloud services, e-commerce, video streaming, that drove a tremendous surge in demand for semiconductors," Mehrota explained to the "Claman Countdown" Wednesday. "At the start of COVID, some of the automotive industry demand was brought down because there was of course uncertainty related to the COVID environment. Now what’s happening is the semiconductor demand is strong across all end market applications."

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In order to alleviate the pain from the semiconductor industry's ongoing chip shortage, Micron will invest more than $150 billion globally over the next decade in memory manufacturing, research and development, including up to $12 billion in capital expenditures and approximately $3 billion on research and development next year. 

"Memory and storage today is really fundamental to everything that’s transforming our lives and our businesses from cloud to smartphones to autonomous vehicles," Mehrota said. "It’s already 30% of the semiconductor industry and growing fast."

Ticker	Security	Last	Change	Change %
MU	MICRON TECHNOLOGY INC.	102.76	+4.39	+4.46%

The investment may also include a potential U.S. fab expansion, which Mehrota emphasizes is contingent upon "economics." 

"The economics have to work in terms of having the scale of production, having cost effectiveness, and long-term sustainability of investments," he said. "This is where we’ll of course be working with governments around the globe, including the U.S. government."

Micron estimates that U.S. memory manufacturing costs run 35% to 45% higher than in lower-cost markets with established semiconductor ecosystems. 

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In June, the Senate overwhelmingly passed a bill focused on boosting U.S. technology and research, which includes $52 billion to encourage semiconductor production. However, the bill has not yet been taken up in the House of Representatives. 

Ticker	Security	Last	Change	Change %
INTC	INTEL CORP.	24.44	+0.43	+1.79%
TSM	TAIWAN SEMICONDUCTOR MANUFACTURING CO. LTD.	191.24	+2.83	+1.50%
SNY	SANOFI	47.98	+0.20	+0.42%

In addition to Micron, Intel has pledged up to $95 billion to expand its chip manufacturing capacity in Europe and Taiwan Semiconductor Manufacturing Company and Sony are also reportedly considering jointly building a chip factory in Japan.