Micron’s HBM Chips in High Demand Amid AI Boom

Being one of just three global suppliers of HBM, alongside South Korean giants SK Hynix and Samsung, has positioned Micron to capitalise on the surging need for semiconductors that fuel generative AI technologies such as the AI processors from Nvidia.

The demand for Micron’s HBM chips has been so overwhelming that it has consistently outstripped supply. This situation has enabled the company to strategically increase prices and secure long-term contracts, ensuring a steady revenue stream. In fact, the popularity of these chips is so high that they are entirely sold out for the entirety of both 2024 and 2025.

The company’s strong Q4 2024 and its bullish first-quarter 2025 revenue forecast, fueled by this AI-driven growth, sent its shares soaring after the bell on Wednesday. The stock jumped approximately 12% to $107.20 in after-hours trading, building on its year-to-date gains of about 12%. This surge in investor confidence presents a potential trading opportunity worth exploring further. Let’s delve deeper.

What Is Micron Technology?

Founded in 1978 by four engineers in the basement of a Boise, Idaho dental office, Micron Technology has grown into a global leader in memory and storage solutions. As the world increasingly embraces data as a primary driver of value and innovation, Micron’s technologies play a critical role in shaping the future.

With over 57,000 patents, 48,000 team members, and a presence in 18 countries — including 11 manufacturing sites and 21 design centres as of 2024 — Micron has established itself as a cornerstone of technological progress. The company provides advanced memory and storage products that are crucial to solving global challenges and unlocking new opportunities in diverse industries.

Its memory solutions include DRAM components and modules, widely used in devices to enhance processing speeds and expand memory capacity. High-bandwidth memory and graphics memory support data-intensive applications like AI and gaming, while newer technologies such as CXL-based memory are designed to meet the demands of next-generation computing.

On the storage front, Micron provides data centre SSDs for cloud computing, client SSDs for personal devices, and specialised SSDs for automotive and industrial applications.

Its NAND and NOR flash storage solutions are crucial for a variety of electronic devices, offering reliable, high-performance options for both consumer and industrial use. The company also integrates memory and controllers into multi-chip packages (MCPs) to optimise performance in mobile and embedded systems.

Micron’s technology is central to multiple hot industries today, driving innovation across sectors.

In AI, for instance, its memory products play a critical role in processing vast amounts of data. In the automotive industry, Micron supports advancements in autonomous driving and advanced driver-assistance systems (ADAS).

Its products also enhance the performance of client PCs and consumer electronics, enabling faster computing and more efficient data storage. In data centres and servers, Micron provides the infrastructure necessary for cloud computing and enterprise-level data processing.

The company’s solutions for industrial IoT facilitate real-time decision-making in automated environments, while its mobile technology powers the memory and storage behind smartphones and other connected devices. Additionally, Micron supports network infrastructure by enabling high-speed data transfer in systems like 5G and data centres.

Micron Technology Surpasses Expectations with Strong AI-Driven Growth and Record Outlook for Fiscal 2025

Micron Technology, the largest U.S. maker of computer memory chips, recently exceeded investor expectations by delivering a strong outlook for the new fiscal year, bolstered by robust demand for AI-driven data centre chips. Despite concerns that the company might miss its guidance, Micron reported a relatively strong fourth quarter for fiscal 2024, with revenue nearly doubling from the same period last year.

The company posted $7.75 billion in revenue, compared to $4.4 billion a year earlier. Profit also surged, reaching $887 million, or 79 cents per share, in stark contrast to the previous year’s loss of $1.43 billion, or $1.31 per share. Adjusted earnings came in at $1.18 per share, beating analyst expectations. For the upcoming fiscal first quarter, Micron forecasts revenue between $8.5 billion and $8.9 billion, with adjusted earnings per share ranging from $1.66 to $1.82, both surpassing market predictions.

According to CEO Sanjay Mehrotra, the company achieved 93% year-over-year revenue growth in the fourth quarter, driven largely by increasing demand for AI applications, which spurred significant growth in data centre DRAM and high-bandwidth memory products. Mehrotra expressed confidence that Micron is entering fiscal 2025 in its strongest competitive position to date, predicting record revenue in the first quarter and substantial profit growth throughout the year.

As AI continues to drive innovation and demand for memory chips, Micron is well-positioned to capitalise on this growing market, enhancing both its revenue potential and profitability.

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