Storage market "worsens"? Micron to exit "consumer storage business," focus on AI storage chips

```Storage chip giant Micron Technology has announced it will exit the consumer storage business, shifting its focus entirely to the production of advanced storage chips—HBM—needed for AI data centers. This strategic shift comes amid global supply shortages of storage chips and may further exacerbate supply issues in the consumer electronics market.

On Wednesday, Micron announced that it will cease selling its "Crucial" branded consumer products through retailers, e-commerce platforms, and distributors worldwide, though product shipments to consumer channels will continue until February 2026. The company's Chief Business Officer Sumit Sadana stated that AI-driven data center growth has caused a surge in memory demand, and Micron made this tough decision to better serve and support its larger strategic customers.

On the day the news was released, Micron shares fell about 3% at one point, but the stock has still risen 178% cumulatively so far this year. Analysts noted that the boom in AI infrastructure construction is causing shortages of key products including storage, and several leading companies plan to invest hundreds of billions of dollars in building large data centers over the next few years, further inflating demand.

According to market research firm TrendForce, Micron is the world's third largest DRAM supplier, only behind Samsung and SK Hynix, with the three companies together holding 92% of the DRAM market. In NAND flash, which is used in SSDs, Micron holds a 13% market share. Micron's exit will leave a large gap in the consumer storage market, and with analysts warning that memory shortages may last for years, it's unclear if any company can fill the void.

Consumer business gives way to HBM business

Micron will continue to ship products through consumer channels until February 2026 but will fully shut down its Crucial brand business, which has operated for nearly 30 years. The brand's products include NVMe solid-state drives, external storage devices, and DDR4 and DDR5 memory modules commonly used for PC upgrades.

Micron has long been shifting toward the HBM (high bandwidth memory) business, which has become the most competitive field among the world's three largest memory suppliers—Micron, South Korea’s SK Hynix, and Samsung. HBM is a type of dynamic random access memory that reduces power consumption through vertical chip stacking, helping with processing large volumes of data and is indispensable in AI development. These chips are priced much higher than consumer-grade memory and typically yield considerable profit margins.

Micron CEO Sanjay Mehrotra revealed in September that in the August quarter, Micron’s HBM revenue grew to nearly $2 billion, equivalent to an annualized $8 billion. In contrast, the company’s Crucial consumer business has never been reported separately in financial statements. Summit Insights analyst Kinngai Chan noted that the consumer storage business is not a significant driver of Micron’s business.

Micron’s latest quarterly cloud storage business achieved 213% year-over-year growth, reflecting the strong momentum in AI data center demand. On Tuesday, Goldman Sachs raised Micron’s stock target price from $180 to $205, maintaining a "hold" rating but stating that, due to the "continued price momentum" in memory, Micron’s quarterly results to be announced in two weeks are "expected to healthily exceed market expectations."

AI chips cause storage supply strain

This decision highlights how the boom in AI infrastructure construction is causing shortages of key inputs such as storage chips. Only a handful of companies have pledged to invest hundreds of billions of dollars in building large data centers over the coming years, leading to global supply strain for storage chips.

Companies such as NVIDIA and AMD manufacture AI chips that consume large quantities of cutting-edge storage chips. For instance, the current generation of NVIDIA's GB200 chips has each GPU equipped with 192GB of memory, while Google’s latest AI chip, Ironwood TPU, requires 192GB of high-bandwidth memory. AMD’s current AI chip MI350 is equipped with 288GB of high-bandwidth memory.

By contrast, the storage specifications and quantities used in phones and computers are much lower—many laptops are equipped with only 16GB of memory. This difference in demand has prompted Micron to shift its limited production capacity toward the more profitable AI data center market.

Consumer market faces supply gap

Micron’s withdrawal will have a significant impact on the consumer storage market. According to TrendForce, Micron holds a 13% market share in NAND flash used for solid-state drives. In the DRAM market, as the third largest supplier, Micron’s exit means PC assemblers have lost the trusted Crucial brand option.

In addition to Samsung and SK Hynix, Micron also supplies GDDR7 video memory for NVIDIA’s RTX 5000 series graphics cards. According to TrendForce data, shipments of both consumer and enterprise systems have already declined.

Reports indicate that Samsung and SK Hynix are also prioritizing profitability instead of taking high-risk capacity expansion. With the global memory supply chain continuously strained, and supply tight for everything from smartphone flash chips to advanced high-bandwidth memory used in AI data centers, Micron's withdrawal could further escalate supply pressure in the consumer market.

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