Micron Technology MU has reported robust financial results for the second quarter of fiscal 2024, citing significant market demand driven by strategic investments in high-bandwidth memory (HBM).
What Happened: Micron’s Q2 2024 Earnings Conference Call on Wednesday highlighted a surge in prices due to a combination of factors such as heightened demand for AI servers, improved market conditions across various sectors, and industry-wide supply reductions.
The increasing demand for AI servers is fueling the growth of HBM, Double Data Rate Synchronous Dynamic Random Access Memory (DDR5), and Data Center Solid-State Drive (SSDs), which in turn is tightening the supply of cutting-edge Dynamic Random Access Memory (DRAM) and NAND technologies. This has led to a positive impact on pricing across all memory and storage end markets.
Micron anticipates further price hikes for DRAM and NAND throughout 2024 and expects record revenue and improved profitability in fiscal 2025.
The company is also making significant strides in advancing its technology nodes for both DRAM and NAND. Over 75% of Micron’s DRAM bits are now on leading-edge 1-alpha and 1-beta nodes, with over 90% of its NAND bits on 176-layer and 232-layer nodes.
Why It Matters: The strong financial results come on the heels of Micron’s anticipated growth due to strong AI demand. The company’s strategic investments in HBM are proving to be a significant driver of this growth, with the technology being a key enabler for AI in training and inference workloads.
Micron’s Q2 earnings report revealed that the company had exceeded analyst expectations on both the top and bottom lines for four consecutive quarters. This latest earnings call further solidifies Micron’s position as a leader in the industry.
The semiconductor industry’s interest in HBM has been on the rise, with Nvidia expressing interest in Samsung’s HBM chips, leading to a surge in the latter’s stock. This trend indicates a growing demand for high-bandwidth memory solutions, positioning Micron favorably in the industry.
Semiconductor. Photo by Anne Nygård on Unsplash
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