By Micron Technology Inc., a prominent chip maker, has made a remarkable comeback after the memory-chip downturn, thanks to the soaring demand for AI-related chips. The company’s fiscal first-quarter results for this year exceeded analysts’ expectations, with its revenue growing to $4.7 billion, a significant 16% increase from the previous year’s $4 billion. This marks Micron’s first revenue growth in six quarters and has positioned the company as a potential AI investment.
Despite still reporting a net loss of $1 billion, Micron is optimistic about returning to an operating profit in its fiscal third quarter. However, what truly caught investors’ attention were the exciting prospects offered by Micron’s new memory-chip module, the HBM3E. Designed specifically for AI and supercomputing applications, this innovative module is set to enter volume production in early calendar 2024. Analysts predict that it will generate several hundred million dollars in revenue during fiscal 2024.
During discussions with analysts, Micron’s Chief Executive, Sanjay Mehrotra, highlighted the tremendous demand for the HBM3E module, revealing that it is already sold out for the entirety of calendar year 2024. This underscores the strong market interest in Micron’s cutting-edge technology.
Excitingly, Micron is not limiting its focus solely to the data center segment. The company also recognizes the vast potential of memory chips for AI-capable PCs and mobile devices. As AI applications increasingly shift towards local processing instead of relying solely on expensive data centers, there will be a growing need for memory upgrades in personal computing devices.
Micron’s return to revenue growth coupled with its groundbreaking advancements in AI-related chips make it a key player in the industry. With its upcoming HBM3E module and its commitment to meeting the evolving demands of the market, Micron is positioned for continued success in the years ahead.
Micron Expects Growth in PC Unit Volumes and Expands Product Portfolio
Micron, a leading memory and storage solutions provider, is forecasting a low- to mid-single-digit percentage increase in PC unit volumes by calendar year 2024. This comes after experiencing double-digit percentage declines in PC unit volumes for the past two years. The company anticipates that the ramping production of AI PCs in the second half of 2024 will drive this growth. AI PCs will require additional DRAM capacity of four to eight gigabytes per PC, as well as increased solid-state drive capacities.
Micron’s product portfolio is well-positioned to seize the opportunities presented by generative-AI applications in smartphones. The company foresees significant potential in this sector and plans to capture the associated memory and storage opportunity.
In fiscal year 2024, Micron intends to increase its capital spending, partially driven by the manufacturing of its new HBM3E modules. Despite this, the company remains committed to financial discipline with respect to capital expenditures.
During the conference call, no questions were raised about the pending lawsuit filed against Micron by Chinese rival Yangtze Memory Technologies for patent infringement. Micron has refrained from commenting on ongoing litigation matters.
Despite potential challenges posed by Chinese sanctions, Micron’s recovery progress seems to be on track. The company is emerging as a viable investment option for those seeking chip makers ready to capitalize on the booming AI industry. Investors should consider Micron as a potential alternative to Nvidia Corp.
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