The explosion of devices that require memory and storage chips has significantly altered the market for those chips, Micron Technology Inc. Chief Executive Sanjay Mehrotra said Wednesday in an interview, as his company’s once-booming stock continued to slide.

At Micron’s MU, -0.76% inaugural Insight 2018 conference in San Francisco on Wednesday, Mehrotra told MarketWatch in an interview that technology transitions such as the rise of data centers and the use of chips in automotive applications and internet-enabled devices is requiring more capital-expenditure spending from tech companies. That is driving demand as it never has before, the CEO contended — in the company’s last earnings call, Mehrotra said one-third of Micron’s $30.89 billion in annual revenue came from data-center and graphics sales.

“The industry fundamentals today are structurally different in terms of demand drivers, in terms of supply growth trends, and in terms of the value that memory and storage brings to the end-market applications, and that makes for long-term industry fundamentals,” Mehrotra told MarketWatch.

Investors, however, appear to think the industry still adheres to traditional PC- and server-based cycles, expecting a prolonged period of oversupply, given the magnitude of the selloff at the first sign of cooling demand after a healthy run, and Micron has proved to be a case study in this area.

For the year, Micron shares are up only 1.2%, a large fall from hitting their highest price since the dot-com bubble in May, while the PHLX Semiconductor Index SOX, +0.97% on Wednesday slipped to a year-to-date loss of 0.9%, after being up as much as 15% earlier in the year. By comparison, the S&P 500 Index SPX, +0.29% is up 4.2%, and the tech-heavy Nasdaq Composite Index COMP, +0.36% is up 7.5% in 2018 following Wednesday’s punishing session.

Micron shares closed down 1.6% at $41.61 Wednesday, relatively unscathed compared with the broader market. The SOX index finished down 4.5%, its worst one-day drop since early February, while the S&P 500 dropped 3.3%, and the Nasdaq fell 4.1% for its worst one-day percentage drop since June 2016.

Micron will likely use the share dive of the past few months to its advantage. In its last earnings call, Micron said it would spend at least $1.5 billion on buybacks in the November-ending quarter, part of a plan to repurchase $10 billion in shares. From the time of the buyback announcement in May to the beginning of the current quarter, shares declined 5.4%, but are now trading at a 25% discount since the announcement.

May’s rosy forecast flipped by September, when the company’s fiscal first-quarter outlook fell below Wall Street estimates, keeping shares in the low-to-mid $40s range established when Micron confirmed prices of NAND chips fell in the third quarter. NAND chips are the flash-memory chips that are used in USB drives and smaller devices such as digital cameras.

“The impact of any supply and demand mismatches in the industry in the past would tend to be larger,” Mehrotra said. “Now those periods last shorter.” Nowadays, the CEO expects that mismatched supply and demand periods should last no longer than “one or two quarters.”

Concerns that Micron would get caught up in a trade war with China started even before tariffs started to fly, as that country’s regulators launched probes into memory-chip makers, and later a Chinese court blocked sales of some of Micron’s memory chips. Micron’s worrisome forecast from September included news that the tariffs would squeeze profit margins.

While the company has said it would take three to four quarters to adjust to the tariffs, Mehrotra said Wednesday that Micron will accomplish that by shifting production of products intended for U.S. markets from China to its other facilities. Outside of China, Micron has manufacturing facilities in the U.S., Scotland, Japan, Taiwan and Singapore.

Additionally, as Micron benefits from AI and machine learning, the company announced at its event Wednesday a new venture-funding unit that will invest $100 million in early-stage startups focused on those areas, with $20 million earmarked for minority-backed startups led by women and other minorities in the industry.