Seagate sparked a memory-stock sell-off after its boss said new factories would take too long to meet AI demand.
According to CNBC, shares in data storage maker Seagate closed down more than six per cent on Monday, leading a wider memory sector wobble. The sell-off followed comments from Seagate chief executive Dave Mosley at a JPMorgan conference, which rattled investors already twitchy about AI supply.
Mosley was asked what it would take to add unit or floor capacity in Seagate’s factories.
“If we took the teams off and started building new factories or bringing up new machines, that would just take too long. You would end up with more capacity, but then you’d slow the rate of growth on that technology,” Mosley said.
That was enough for the cocaine nose jobs of Wall Street to go into a panic.
Seagate needs memory chips for its solid-state drives, which are used in data centres, where the AI gold rush has been burning through kit. Shares of Micron, SanDisk and Western Digital all closed roughly five per cent lower.
Memory chip stocks have soared in recent months as AI spending has driven demand for data centre hardware into silly territory. The chips are a key part of the AI buildout, and the market has been pricing them as if demand will keep climbing forever.
Chip production cycles stretch across many quarters for a single unit, which makes the cocaine nose jobs of Wall Street nervous about how long suppliers can keep milking the boom.
Mosley tried to talk up the company’s grip on “very long lead times” and predictable supply for customers.
“We know what’s coming out a year from now. And we’ve basically gone to the customers and said, ‘Look, if you want to plan this really well, which it should be for your data centres, we know what’s coming out. You can buy this stuff up to a certain period.’ And so we want to keep that four or five quarters of visibility very, very solid for what’s being built. But the demand is significantly higher than that.”
That last line was the bit investors heard. The AI boom has turned memory and storage into a shortage game, and Seagate’s comments suggested the industry cannot simply conjure factories from a consultant’s slide deck.
