There's no quick fix for chip shortage despite new plants, says Jim Cramer
Speakers
Jim Cramer
— Host, Mad Money
Summary
Jim Cramer discusses Micron's $100 billion New York fab groundbreaking and the broader semiconductor shortage. He argues the shortage of lower-end data-center memory and flash chips will persist because new plants take years and equipment capacity is tight, keeping memory/storage prices and related stocks elevated. He also highlights semiconductor capital equipment makers as beneficiaries and contrasts NVIDIA/TSMC's high-end chip supply chain, which has no comparable bottleneck.
- Micron broke ground on a $100 billion New York semiconductor facility supported by CHIPS Act subsidies.
- Cramer says severe shortages in lower-end data-center semiconductors and memory chips are driving prices higher.
- New fab capacity will take years and is unlikely to resolve the shortage without weaker demand.
- Memory and storage stocks like Micron, Western Digital, Seagate, and SanDisk have surged and can keep rising.
- Applied Materials, KLA, and Lam Research benefit from the need to expand chip production equipment.
- NVIDIA and TSMC are positioned without a high-end chip bottleneck, unlike memory.
- Cramer credits NVIDIA's Jensen Huang for superior foresight on data-center demand.
Ideas
Memory shortage lifts storage chip stocks.
Severe shortages of lower-end data-center memory and flash chips, worsened by cautious management at Micron, SanDisk, Western Digital, and Seagate, are driving chip and flash memory prices higher. New capacity such as Micron's $100 billion plant will take years to matter and equipment cannot be built fast enough, so demand remains stronger than supply and these storage/memory stocks can keep rising after their huge gains.
Chip equipment makers benefit from fab buildout.
Micron's $100 billion facility and the broader need to expand memory production will require massive amounts of semiconductor capital equipment from Applied Materials, KLA, and Lam Research. The equipment makers also underestimated data-center demand and did not build enough machinery, leaving their stocks strong as the industry scrambles to add capacity.
NVIDIA, TSMC avoid AI chip bottleneck.
NVIDIA had far better foresight than memory makers, ensuring its products are more plentiful. It partnered with Taiwan Semiconductor, the best foundry, to make all the high-end chips needed, and unlike memory there is no bottleneck or shortage, allowing NVIDIA to deliver its latest products and reflecting Jensen Huang's exceptional technological leadership.
