Micron Shares Drop 15% After Blowout Q2, Tesla’s $25 B Terafab Highlights Supply Strain
Micron shares have fallen about 15% over four trading days despite blowout Q2 revenue driven by AI memory chip demand. Tesla and SpaceX’s planned $25 billion Terafab in Texas—projected to scale to 1 million wafer starts per month—underscores capacity constraints at suppliers like Micron.
1. Micron stock falls despite strong Q2 earnings
Micron reported blowout second-quarter results driven by robust AI memory chip demand yet saw its shares drop approximately 15% over four trading days. Investors cited profit-taking and broader semiconductor weakness as factors overruling the company’s strong revenue beat.
2. Tesla’s Terafab underlines supply constraints
Tesla and SpaceX have unveiled plans to build a $25 billion Terafab with initial capacity of 100,000 wafer starts per month, scaling to 1 million. This initiative highlights shortages at major suppliers like Micron as OEMs seek to secure advanced chip capacity for AI and satellite applications.
3. Capacity expansion prospects
Micron has signaled plans to expand its own production lines but faces lead times of several quarters for new fabs. The company is exploring partnerships and capex ramp-ups to address escalating AI-driven memory demand and mitigate potential shortfalls.