In a bid to compete with South Korean rivals, Micron Technology Inc. MU is planning to expand its high-bandwidth memory chip production in the U.S. significantly and is also considering manufacturing in Malaysia.
What Happened: Micron, the leading U.S. memory chip maker, is constructing test production lines for advanced HBM chips in the U.S. and is contemplating HBM production in Malaysia for the first time, reported Nikkei Asia on Wednesday, citing sources. The move is aimed at capturing a larger share of the demand from the ongoing AI boom.
The company is aiming to more than triple its market share for HBM, a crucial component in AI chips, to the “mid-20” percentage range by 2025. This is approximately the same level as its share in the market for more conventional dynamic random access memory chips, which TrendForce data puts at about 23% to 25%.
Micron is expanding its HMB-related research and development facilities, including production and verification lines, at its headquarters in Boise, Idaho. The company is also considering building HBM production capacity in Malaysia, where it already has chip testing and assembly facilities.
Only SK Hynix, Micron, and Samsung Electronics have the capability to manufacture HBM for cutting-edge AI chips at present. SK Hynix is in the process of constructing new facilities in the United States and South Korea to enhance its production capacity. Meanwhile, Samsung is seeking validation from Nvidia to provide its HBM for the B200 chipset.
In terms of market share, SK Hynix dominates the global HBM market with over 50%, followed by Samsung with a 42.4% share, according to TrendForce market research. Micron lags significantly behind the other two manufacturers.
Micron did not immediately respond to Benzinga's request for comment.
Why It Matters: The move by Micron to expand its HBM chip production comes in the wake of the ongoing AI boom, which has seen a surge in demand for AI chips. This demand is being driven by the increasing use of AI in various industries, including technology, healthcare, and finance. Micron’s expansion plans are in line with its goal to capture a larger share of this growing market.
This upgrade came on the back of Micron’s exceptional performance in HBM3E, a critical component in the semiconductor industry. On Tuesday, Wedbush analyst Matt Bryson raised his price target on Micron ahead of the company’s earnings, anticipating a beat-and-raise quarter.
Malaysia has been emerging as a significant hub for semiconductor manufacturing, attracting major global players amid the escalating U.S.-China tech war. The country’s well-established infrastructure and skilled labor force have made it an attractive destination for global chip firms, including Micron.
Price Action: Micron Technology Inc’s stock closed at $153.45 on Tuesday, marking a 3.80% increase for the day. In after-hours trading, the stock rose further 0.93%. Year to date, Micron’s stock has seen a significant surge of 86.36%, according to the data from Benzinga Pro.
Image Via Shutterstock
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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