Memory chips now account for 50%-55% of semiconductor industry revenue, up from roughly 20%-30% historically, according to Susquehanna analyst Mehdi Hosseini.

Hosseini said Wednesday that memory has become the industry's new "king" as AI data centers demand more of it. He called memory the "primary driver" of semiconductor revenue growth, with total industry revenue on track to reach roughly $1.5 trillion this year.

AI Is Rewriting the Chip Spending Mix

The AI spending boom is no longer just about processors from Nvidia Corp. (NASDAQ: NVDA). Data centers also need huge amounts of DRAM to feed those chips with data and NAND to store it.

Research firm TrendForce says supply is still struggling to keep up. It expects DRAM and NAND to absorb 47% of major cloud providers' total capital spending this year, rising to 68% in 2027.

That helps explain why memory's share of the chip industry has surged. Market-research firm Omdia separately expects memory to account for more than half of total semiconductor revenue in 2026.

Micron Rides the Memory Boom

Micron Technology Inc. (NASDAQ: MU) is one of the clearest U.S.-listed beneficiaries.

Global DRAM revenue jumped 59.5% sequentially to $154.73 billion in the calendar second quarter, according to TrendForce. Micron's DRAM revenue rose 65.5% to $36 billion, giving it a 23.3% market share.

Micron has also begun high-volume shipments of HBM4, the high-bandwidth memory used alongside advanced AI processors.

CEO Sanjay Mehrotra said last month there is "no AI without memory," describing memory as the "strategic infrastructure of the AI era."

What the Numbers Show

Micron's DRAM revenue growth of 65.5% outpaced the global DRAM market growth of 59.5% in the calendar second quarter. This divergence suggests Micron is gaining share or benefiting from a higher mix of premium products like HBM4 relative to the broader market average.

Can Memory Stay King?

Memory has historically been highly cyclical, with high prices encouraging new supply that can eventually push prices lower. Competition is also increasing: Market-research firm Counterpoint Research estimates Chinese rival CXMT captured 10% of global DRAM revenue in the second quarter, up from 4% a year earlier.

Prediction traders still see Nvidia as the defining corporate winner from AI. Polymarket gives Nvidia a 79% chance of ending 2026 as the world's largest company in a market with about $6.95 million traded.

Hosseini's thesis suggests more of the spending underneath that Nvidia-led boom is flowing to memory suppliers. For Micron, the question is whether that shift can outlast the industry's old boom-and-bust cycle.

Micron Technology (NASDAQ: MU) has delivered an average annual return of 69.11% over the past five years, significantly outperforming the broader market.

The memory chip maker currently commands a market capitalization of $1.15 trillion. This valuation reflects sustained investor confidence and strong price appreciation in the semiconductor sector.

Historical Investment Returns

For context on the magnitude of this growth, an investor who purchased $1,000 worth of Micron stock five years ago would see that position grow to $13,950.73 today. This calculation is based on a share price of $1014.91 at the time of writing.

Market Context

The company’s performance highlights the impact of compounded returns over a multi-year horizon. With a total market value exceeding $1 trillion, Micron remains a heavyweight in the technology sector.

What the Numbers Show

The divergence between the initial investment amount ($1,000) and the current value ($13,950.73) illustrates the power of compounding in high-growth equity markets. The 57.54% annualized outperformance against the market benchmark suggests that Micron’s revenue and margin expansions during this period have been priced aggressively by investors.