Key Highlights

  • Micron Technology (Nasdaq: MU) on the Nasdaq Global Select Market estimates Capital-expenditure/">Capital Expenditure for property, plant, and equipment, net of government incentive proceeds, to exceed $25 billion in FY2026 — the largest annual capex programme in the company's history.
  • Capital expenditure in H1 FY2026 alone was $11.78 billion, versus $7.26 billion in H1 FY2025, representing a 62% year-on-year increase in the pace of physical Investment.
  • New fabs under construction or recently completed include two in Idaho (first wafers mid-2027 and end-2028), two in Clay, New York (first Supply from 2030), an HBM advanced packaging Facility in Singapore (from calendar 2027), a second fab in Singapore (from H2 2028), and a newly acquired fab in Taiwan ($1.8 billion, operational from 2028).
  • The company disclosed purchase obligations of approximately $2.10 billion for property, plant, and equipment as of February 26, 2026, substantially all payable within one year, alongside long-term Debt of $9.56 billion on the Balance Sheet.
  • History shows that every major memory capex cycle has eventually produced oversupply; the critical variable this time is whether AI Demand growth can absorb the incremental supply before pricing corrects.

 

Capital expenditure is the most consequential number in any capital-intensive Business, because it represents not what the company has earned, but what it believes about its own future. A company that commits $25 billion in a single year to building physical Manufacturing infrastructure is making a statement about demand that goes far beyond any Earnings Call commentary or investor day presentation. It is betting its balance sheet on the durability of the market environment that is generating today's extraordinary results.

The Scale of the Commitment

Micron Technology (NASDAQ: MU) has guided that capital expenditures for FY2026, net of government incentive proceeds, will exceed $25 billion. This is a number that requires context. Micron's total Revenue for FY2025 was approximately $37.5 billion, suggesting that the company is investing approximately two-thirds of a full year's revenue in new capacity in a single year. The H1 FY2026 Cash Flow Statement shows $11.78 billion in capital expenditure already deployed, consistent with the full-year guidance. For comparison, H1 FY2025 capital expenditure was $7.26 billion — meaning the annual rate of capital spending has increased by more than 60% year-on-year.

The projects funded by this capital are specific and disclosed. Two DRAM fabs in Boise, Idaho: the first, under construction since October 2023, will produce its first DRAM wafers in mid-calendar 2027; the second, construction beginning in 2026, is expected to be operational by end-2028. In Clay, New York, groundbreaking on the first of up to four planned fabs occurred in January 2026, with supply expected from 2030 onward. In Singapore, an HBM advanced packaging facility broke ground in January 2025 and will expand total advanced packaging capacity from calendar 2027, while a second fab in the existing NAND manufacturing complex broke ground in January 2026 and will provide additional capacity from H2 2028. In Taiwan, the completed Acquisition of a wafer fabrication facility in Tongluo, Miaoli County — purchased from Powerchip Semiconductor Manufacturing Corporation for $1.8 billion in March 2026 — is expected to support meaningful product shipments from the existing fab from 2028.

The Economics of Memory Fab Construction

Semiconductor fabs are among the most capital-intensive Assets ever constructed by private enterprise. A leading-edge DRAM fab requires thousands of precisely controlled manufacturing steps, specialised equipment costing hundreds of millions of dollars per tool, a clean-room environment maintained at extraordinary levels of particulate control, and a workforce of engineers who require years of Training to become productive. The total investment in a modern leading-edge DRAM fab, from groundbreaking to first production wafer, typically ranges from $10 billion to $20 billion. Micron is building or commissioning multiple such facilities simultaneously across three continents.

The per-unit economics that justify this investment depend on two variables: the cost per bit of production — which improves with each process node transition and with scale — and the selling price per bit — which is determined by supply and demand. Process technology advancement reduces cost per bit reliably, as Micron has demonstrated with its transition to the 1γ DRAM node using extreme ultraviolet lithography. Selling price per bit is the variable that management cannot control. And this is where the capex question becomes a risk question.

The Historical Warning

Micron's FY2025 10-K contains a risk disclosure that every investor evaluating the company's capital programme should read carefully: we, and some of our competitors, have plans to construct new fabrication facilities and/or ramp production at existing fabrication facilities. Increases in worldwide supply of semiconductor memory and storage, if not accompanied by commensurate increases in demand, could lead to declines in average selling prices for our products and could materially adversely affect our business, results of operations, or financial condition. This is not legal boilerplate. It is a historically grounded warning from a company that lived through severe oversupply in FY2023, when gross margins fell to approximately 22% and the company recorded significant losses.

The specific risk in the current environment is that all three major DRAM producers — Samsung, SK Hynix, and Micron — are expanding capacity simultaneously. If the AI infrastructure investment cycle moderates before new fab capacity reaches the market, the supply-demand balance could shift. Micron's new Idaho fab produces first wafers in 2027. The question is whether AI demand will still be growing at a rate that can absorb this incremental supply. Given that AI model training and inference requirements are themselves growing exponentially, a significant demand deceleration before 2027 would require a fundamental change in the trajectory of AI adoption.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, or any other form of professional advice. All data and figures are sourced exclusively from Micron Technology Inc.'s (NASDAQ: MU) Form 10-Q for the quarter ended February 26, 2026 and Form 10-K for the fiscal year ended August 28, 2025, as filed with the US Securities and Exchange Commission.