Micron said on Wednesday that it plans to stop selling memory to consumers to focus on meeting demand for high-powered artificial intelligence chips.
"The AI-driven growth in the data center has led to a surge in demand for memory and storage," Sumit Sadana, Micron business chief, said in a statement. "Micron has made the difficult decision to exit the Crucial consumer business in order to improve supply and support for our larger, strategic customers in faster-growing segments."
Micron's announcement is the latest sign that the AI infrastructure boom is creating shortages for inputs like memory as a handful of companies commit to spend hundreds of billions in the next few years to build massive data centers. Memory, which is used by computers to store data for short periods of time, is facing a global shortage.
Micron shares are up about 175% this year, though they slipped 3% on Wednesday to $232.25.
AI chips, like the GPUs made by Nvidia and Advanced Micro Devices , use large amounts of the most advanced memory. For example, the current-generation Nvidia GB200 chip has 192GB of memory per graphics processor. Google's latest AI chip, the Ironwood TPU, needs 192GB of high-bandwidth memory.
Memory is also used in phones and computers, but with lower specs, and much lower quantities — many laptops only come with 16GB of memory. Micron's Crucial brand sold memory on sticks that tinkerers could use to build their own PCs or upgrade their laptops. Crucial also sold solid-state hard drives.
Micron competes against SK Hynix and Samsung in the market for high-bandwidth memory, but it's the only U.S.-based memory supplier. Analysts have said that SK Hynix is Nvidia's primary memory supplier.
Micron supplies AMD, which says its AI chips use more memory than others, providing them a performance advantage for running AI. AMD's current AI chip, the MI350, comes with 288GB of high-bandwidth memory.
Micron's Crucial business was not broken out in company earnings. However, its cloud memory business unit showed 213% year-over-year growth in the most recent quarter.
Analysts at Goldman on Tuesday raised their price target on Micron's stock to $205 from $180, though they maintained their hold recommendation. The analysts wrote in a note to clients that due to "continued pricing momentum" in memory, they "expect healthy upside to Street estimates" when Micron reports quarterly results in two weeks.
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