Chip giant Micron’s new HBM3E module poised to capture AI memory and storage opportunity

December 22, 2023 | by


Micron Technology Inc., a leading chip giant, is poised to capture the growing opportunity in AI memory and storage with its new HBM3E module. The company’s return to revenue growth in the last quarter, driven by the boom in AI-related chips, has put it in the spotlight as a potential AI investment. Micron’s fiscal first-quarter results exceeded analysts’ estimates, with revenue reaching $4.7 billion, its first growth in six quarters. Investors were especially pleased with the announcement of Micron’s HBM3E module, designed for AI and supercomputing. With the module set to go into volume production in early 2024, Micron expects it to generate significant revenue and meet the growing demand for AI-capable PCs and mobile devices. With this promising development, Micron is positioning itself as a strong contender in the AI market, capturing the memory and storage opportunity.

Chip giant Micron’s new HBM3E module poised to capture AI memory and storage opportunity

Micron Technology Inc., a leading chip giant, is making waves in the AI industry with its latest innovation, the HBM3E module. This new module is designed specifically for AI and supercomputing applications, and its introduction has generated significant interest among investors. With volume production set to begin in early 2024, Micron is expected to see substantial revenue generation from the HBM3E module in fiscal 2024.

Chip giant Microns new HBM3E module poised to capture AI memory and storage opportunity

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Micron’s return to revenue growth linked to boom in AI-related chips

Micron’s recent return to revenue growth can be attributed in part to the increasing demand for AI-related chips. As the AI industry continues to expand rapidly, there is a growing need for advanced memory and storage solutions. Micron’s expertise in this area has positioned the company as a key player in capturing the opportunities presented by AI.

Micron’s fiscal Q1 results exceed analysts’ estimates

Micron’s fiscal first-quarter results surpassed analysts’ estimates, demonstrating the company’s strong performance. With revenue reaching $4.7 billion, a 16% increase from the previous year, Micron’s growth trajectory is impressive. Despite reporting a net loss of $1 billion, Micron is confident in returning to an operating profit in its fiscal third quarter.

Introduction of Micron’s HBM3E module generates investor interest

Investors are increasingly intrigued by Micron’s HBM3E module, which shows great promise for AI and supercomputing applications. With volume production scheduled for early 2024, this innovative module is expected to generate significant revenue for Micron in fiscal 2024. The high demand for the HBM3E module is evident, as the company’s HBM supply has already sold out for calendar year 2024.

HBM3E module built for AI and supercomputing

Micron’s HBM3E module is specifically designed to meet the demands of AI and supercomputing. As AI technologies advance, the need for faster and more efficient memory and storage solutions becomes crucial. The HBM3E module addresses this requirement by offering enhanced capabilities and performance, making it ideal for AI-intensive applications.

Volume production of HBM3E module to begin in early 2024

Micron plans to commence volume production of its HBM3E module in early 2024. This timeline reflects the company’s commitment to meeting the growing demand for AI memory and storage solutions. By starting production early, Micron aims to secure its position as a leading provider of cutting-edge technologies in the AI industry.

Expected revenue generation from HBM3E module in fiscal 2024

The introduction of the HBM3E module is projected to generate several hundred million dollars in revenue for Micron in fiscal 2024. As the demand for AI-related chips continues to rise, Micron is well-positioned to capitalize on this opportunity. With the HBM3E module at the forefront of the company’s offerings, Micron is poised to see significant growth in the coming years.

HBM supply sold out for calendar year 2024

The high demand for Micron’s HBM3E module has resulted in the complete sell-out of the company’s HBM supply for calendar year 2024. This demonstrates the market’s recognition of the module’s value and potential. By securing orders well in advance, Micron has solidified its position in the AI memory and storage market.

Potential for memory chips in AI-capable PCs and mobile devices

In addition to data centers, Micron sees great potential for memory chips in AI-capable PCs and mobile devices. As AI applications become increasingly prevalent, there is a need for localized AI processing power in these devices. Micron’s memory chips offer the capacity and performance required to support AI functionalities, making them essential components for AI-enabled consumer electronics.

Forecasted growth in PC unit volumes in 2024

Micron forecasts a low- to mid-single-digit percentage growth in PC unit volumes in calendar year 2024. After experiencing consecutive declines in PC unit volumes, this projected growth indicates a positive shift in the market. The increasing demand for AI-capable PCs is expected to drive this growth, with Micron’s memory chips playing a vital role in meeting the requirements of these devices.

Increased capacity of DRAM and solid-state drives for AI PCs

With the rise of AI-capable PCs, the demand for increased memory capacity is on the rise as well. Micron anticipates that AI PCs will require an additional capacity of four to eight gigabytes of DRAM per PC. Moreover, solid-state drives (SSDs) will also need to have increased capacities to accommodate AI applications. Micron’s extensive product portfolio includes DRAM and SSD solutions, ensuring it is well-equipped to cater to the evolving needs of AI PCs.

Generative-AI applications expected on smartphones

Micron predicts that generative-AI applications will become increasingly popular on smartphones. These applications utilize AI algorithms to generate content such as images or video. With the growing prominence of AI on smartphones, Micron’s product portfolio is well-suited to capture this market opportunity. By providing memory and storage solutions optimized for AI, Micron can meet the demands of smartphone users seeking enhanced AI capabilities.

Micron’s product portfolio poised to capture memory and storage opportunity

Micron’s diverse product portfolio positions the company to capitalize on the growing memory and storage opportunities in the AI industry. With offerings such as the HBM3E module, DRAM, and SSD solutions, Micron can provide a comprehensive range of products tailored to meet the unique requirements of AI applications. This breadth of offerings enables Micron to cater to a wide range of customers and solidify its position in the market.


Capital spending increase for manufacturing of HBM3E module

In response to the expected demand for the HBM3E module, Micron plans to increase its capital spending in fiscal 2024. This increase will support the manufacturing of the module and ensure sufficient supply to meet market demands. Despite this expansion, Micron remains committed to maintaining strict discipline in its capital expenditures to ensure financial stability and sustainable growth.

Micron remains disciplined on capital expenditure

While Micron has allocated additional capital for the manufacturing of the HBM3E module, the company emphasizes its commitment to remaining disciplined in its overall capital expenditure strategy. This approach reflects Micron’s focus on prudent financial management and its dedication to long-term success. By balancing investment with financial stability, Micron aims to achieve sustained growth in the AI memory and storage market.

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Micron’s road to recovery moving forward

Micron’s strong performance in fiscal Q1 and its strategic focus on AI-related chips position the company for a successful recovery. With the HBM3E module and other innovative products in its portfolio, Micron is well-equipped to capture opportunities in the AI memory and storage market. As the demand for AI continues to grow, Micron’s commitment to technological advancement and financial prudence puts it in a favorable position for sustained success.

Opportunity for investors in chip makers beyond Nvidia

Investors looking beyond Nvidia Corp. will find an exciting opportunity in chip makers like Micron. With its strong foothold in the AI industry and its innovative product portfolio, Micron offers a compelling investment prospect. As the demand for AI-related chips continues to surge, investing in chip makers like Micron could yield significant returns. By identifying the potential of the AI market and aligning investment strategies accordingly, investors can position themselves for long-term success in the rapidly evolving tech industry.

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