Seagate shares drop 8% as CEO warns new factories would take too long to meet AI chip demand

Seagate leads memory sell-off as CEO says it would 'take too long' to build new factories

Samsung strike looms, causes ripple effect through memory stocks Shares of memory chip maker Seagate slipped more than 8% Monday, leading a group-wide sell-off after comments from CEO Dave Mosley raised concerns that it won't be able to meet the soaring demand fueled by the artificial intelligence buildout. Mosley was asked at a JPMorgan conference on Monday what it would take to add unit or floor capacity to produce more chips 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," Mosely said.

Memory stocks hit by production capacity concerns

Speaking at a JPMorgan conference, Seagate CEO Dave Mosley explained that rapidly scaling up production capacity remains particularly complex. According to him, building new facilities and installing new equipment would take too long and could potentially hinder the group's technological advancements. These comments reignited fears over the long lead times inherent in the semiconductor industry, at a time when memory chips have become essential to the development of artificial intelligence infrastructure. The sector had rallied strongly in recent months, on the back of massive AI investments. However, Dave Mosley pointed out that Seagate must manage extensive production cycles and maintain visibility several quarters ahead for its customers. The executive indicated that the company is seeking to secure visibility on four to five quarters of available capacity, while acknowledging that demand continues to significantly outstrip current production capabilities.