By Juby Babu

March 18 (Reuters) - Micron Technology forecast third-quarter revenue above Wall Street expectations after posting a sharp jump in the second quarter on booming demand ‌for memory chips used in artificial intelligence systems, while tighter supply drove record ‌earnings.

But its shares fell 5% in extended trading on Wednesday after Micron said it was boosting its 2026 capital ​spending plan by $5 billion to keep up with the rising demand.

The company aims to spend more than $25 billion this fiscal year and said spending would rise further in 2027 as expansion in manufacturing facilities could result in construction-related expense climbing by more than $10 billion from 2026.

"Construction activity ‌is really driving a very ⁠significant increase in our overall capex," Sumit Sadana, Micron's chief business officer told Reuters in an interview.

He said the company's acquisition of a fabrication ⁠plant from Taiwan's Powerchip Semiconductor Manufacturing Corp for $1.8 billion was also pushing 2026 spending higher.

The plant will help boost its output of dynamic random access memory wafers beginning in the second half of ​2027. ​Micron also plans to build a second manufacturing ​facility at the site.

The higher capex ‌outlook "makes sense, given the shape of the demand and their need to continue investing to meet capacity - which has no signs of easing any time soon," said Ben Bajarin, CEO of Creative Strategies.

Customers are committing to long-term data center investments as technology companies race toward artificial general intelligence.

The resulting growth in capacity is fueling a sharp rise in demand for advanced ‌memory and storage, creating a supply crunch and driving ​price increases, helping Micron book record profit margins in ​the quarter ended February.

Micron, whose shares ​have gained more than 61% this year, is one of the only ‌three major suppliers of high bandwidth memory ​chips essential to AI ​technology, along with South Korea's Samsung and SK Hynix.

The chipmaker forecast third-quarter revenue of $33.5 billion, plus or minus $750 million, compared with analysts' average estimate of $24.29 billion, according to ​data compiled by LSEG.

Revenue ‌of $23.86 billion for the second quarter topped expectations of $20.07 billion. Micron's board also approved ​a 30% increase to its quarterly dividend.

(Reporting by Juby Babu in Mexico ​City; Editing by Shailesh Kuber and Arun Koyyur)