The numbers that show where the money is going
The clearest evidence of an AI-driven chip crunch is in the filings of one memory maker. Micron Technology spent $7.676 billion on capital expenditure (factories and equipment) in fiscal 2023.1 It spent $8.386 billion in fiscal 2024.1 In fiscal 2025 the figure was $15.857 billion.1 That is roughly 89% more than the year before, and more than double fiscal 2023. All three figures come from SEC filings and have been checked against them.
The quarterly figures show the same acceleration. In the first quarter of Micron's fiscal 2024 it spent $1.796 billion.1 In the first quarter of fiscal 2025 it spent $3.206 billion.1 In the first quarter of fiscal 2026 it spent $5.389 billion.1 That is about three times the fiscal 2024 quarter. A company spending three times as much on plant in two years is not behaving as if it expects demand to fade.
A balance sheet filling up as fast as the spending
Micron's cash tells a similar story. At the end of fiscal 2023 it held $8.577 billion.2 At the end of fiscal 2024 it held $7.041 billion, and at the end of fiscal 2025, $9.642 billion.2 For years this was a company whose cash moved within a fairly narrow band.
The latest quarters break out of that band. The filings show $13.908 billion in the second quarter of fiscal 2026, against $7.552 billion in the same quarter a year earlier.2 They show $24.995 billion in the third quarter of fiscal 2026, against $10.163 billion in the third quarter of fiscal 2025.2 That is about two and a half times the year-earlier balance. The dossier does not say where the extra cash came from, so we cannot say whether it is operating profit, borrowing or both. What the filings do establish is that Micron is both spending record amounts on new capacity and holding far more cash than it did a year ago.
What it costs to make the product
Cost of revenue, the direct cost of producing what Micron sells, grew much more slowly than capital spending. It was $16.956 billion in fiscal 2023, $19.498 billion in fiscal 2024 and $22.505 billion in fiscal 2025.3 In the latest quarters it was $5.997 billion in the first quarter of fiscal 2026, against $5.361 billion a year earlier.3 In the second quarter it was $6.105 billion, against $5.090 billion a year earlier, about 20% higher.3
This is where we have to be careful. The verified set contains no revenue or profit figures, so we cannot calculate Micron's margins. Costs up around 12% to 20% year on year while investment roughly triples is a pattern worth knowing. It does not, on its own, show that the business is more profitable.
Buying certainty: the supply deals
Capital spending is one response to scarcity. Another is signing deals to secure supply. Nvidia's Raj Mirpuri said of the company's expanded arrangement with SK Hynix: "The expansion will include a co-develop opportunity for us on the next-generation SK Hynix AI memory, and this will help us secure a stable supply of HBM memory."4 HBM is the specialised, high-speed memory that AI processors depend on. The article reports that Nvidia has spent much of 2026 signing deals across Asia, the Middle East and Europe to secure the chips, memory and power it needs.4 It also reports roughly $950 billion in new AI agreements signed at a July 24 summit in San Francisco attended by Nvidia's Jensen Huang and OpenAI's Sam Altman.4 We could not tie that total to any single deal in the dossier.
Deals are happening elsewhere in the chain. Skyworks and Qorvo have announced their expected leadership team for a combined company, taking effect when their previously announced transaction completes.5 Skyworks and Qorvo are both radio-chip makers, and the transaction is still pending. Bob Bruggeworth said: "Today's announcement reflects the strong partnership that has shaped our integration planning efforts from the very beginning."5 French firms Bull and Kalray announced a collaboration on networking technology for AI and high-performance computing.6 The two will also work on Ultra Ethernet, a new open networking standard.6
Public money is also arriving. GlobalFoundries signed a letter of intent with the U.S. Department of Commerce under which the CHIPS Research and Development Office is expected to award it $300 million to advance silicon photonics, which moves data using light.7 A letter of intent is not a completed award. AMD's Mark Papermaster said that "silicon photonics and advanced packaging will be key to delivering the bandwidth, energy efficiency, and system-level connectivity required for the next generation of AI cluster infrastructure."7
The small-company view: demand without a clear price signal
The pressure shows up at the small end of the sector too. Solitron Devices, a thinly traded company on the OTC Pink market, reported net sales up 101% to about $5.44 million in its fiscal 2027 first quarter.8 Over the same period new bookings fell 48% to $1.45 million, while backlog rose 28% to $23.34 million.8 The company said it expects revenue to continue "at this level or greater for the remainder of the 2027 fiscal year."8 Rising sales alongside falling new orders is a mixed picture. It is a reminder that a sector-wide story is made of companies moving at different speeds.
Wall Street's call, and how well sourced it is
Sandisk and Micron have both drawn bullish calls. The research firm Lynx Equity Strategies rates Sandisk a clear buy with anticipated upside of 49%, and Micron a clear buy with anticipated upside of 33%.9 The call was reported alongside a rise of more than 4% in ASML's shares, which the article describes as a sympathy rally.9 These are one firm's forecasts, not facts about future prices.
The source also deserves scrutiny. Our measurement of the outlet that carried the call, the Motley Fool, found that only 22% of 18 checked claims held up.9 That sample is small and the record is weak, so treat the percentages as an opinion. By contrast, the Micron spending and cash figures above come straight from SEC filings. The same outlet also reported that Lattice Semiconductor's Esam Elashmawi sold 16,773 shares at a weighted average of $134.56 per share on Aug. 16 and 17, 2026, a sale of about $2.3 million.10 One executive selling shares is not a signal by itself, and the dossier gives no reason for the sale.
Another source in this story fares worse. A profile of Hannah Earley, cofounder of Vaire Computing, describes chips that recycle energy usually lost as heat.11 She says she wants "to tackle every part of how computers are built, and rethink it in these terms."11 Our checks held up none of the 11 claims examined from that publication.11 We report her words as hers, and the technology as unproven.
Custom silicon: the newcomers' pitch
Beyond the established names, Via News's tracking of this story flags a push by newer entrants toward custom inference chips, which are chips built for running AI models rather than training them. On October 8, Zeta said it had begun developing a specialised AIM chip with partners, using what it called a capital-light approach.12 That means it will not build factories itself. This is our reading of the dossier, not a verified outcome, and the dossier contains no financial detail on the chip.
What to watch
- Micron's next filing. Does capital spending keep rising from $5.389 billion a quarter, and does cost of revenue stay well below the growth in investment?1,3
- What the $24.995 billion of cash is used for. Spending, debt repayment or returns to shareholders would each tell a different story.2
- The GlobalFoundries letter of intent. Whether it becomes a signed award.7
- Skyworks and Qorvo. Whether the pending transaction completes.5
On whether you already own any of this: the dossier gives no index weightings, so we cannot say how much of a typical fund these companies make up. Check your fund's holdings list.
