HBM demand is strong, Micron expects first quarter revenue of $8.7 billion exceeding expectations
Micron Technology's stock price surged about 14% in after hours trading after the memory manufacturer predicted higher than expected revenue for the first quarter due to strong demand for its memory chips used for artificial intelligence (AI) computing.
Micron is one of only three suppliers of high bandwidth memory (HBM) chips, along with South Korean companies SK Hynix and Samsung, allowing the American company to profit from the demand for semiconductors that help drive generative artificial intelligence technology.
HBM is a space saving and energy-efficient dynamic random access memory chip (DRAM) that is crucial for graphics processing units focused on artificial intelligence, helping to process large amounts of data.
Sanjay Mehrotra, CEO of Micron, said in a conference call with analysts, "The demand from data center customers remains strong, and customer inventory levels are healthy
The company announced in June that all sales of its HBM chips in 2024 and 2025 have been sold out, and pricing has been determined.
Micron expects its first quarter revenue to reach a record high of approximately $8.7 billion (fluctuating by $200 million), and expects its gross profit margin to soar to approximately 39.5% during the same period.
According to data from the London Stock Exchange, analysts expect first quarter revenue to be $8.28 billion with an adjusted gross margin of 37.7%.
HBM is a space saving and energy-efficient dynamic random access memory chip (DRAM) that is crucial for graphics processing units focused on artificial intelligence, helping to process large amounts of data.
Sanjay Mehrotra, CEO of Micron, said in a conference call with analysts, "The demand from data center customers remains strong, and customer inventory levels are healthy
The company announced in June that all sales of its HBM chips in 2024 and 2025 have been sold out, and pricing has been determined.
Micron expects its first quarter revenue to reach a record high of approximately $8.7 billion (fluctuating by $200 million), and expects its gross profit margin to soar to approximately 39.5% during the same period.
According to data from the London Stock Exchange, analysts expect first quarter revenue to be $8.28 billion with an adjusted gross margin of 37.7%.
The AI boom has also helped Micron alleviate the impact of excess memory chip inventory in the personal computer and smartphone markets.
It is expected that personal computers integrated with AI technology will have more memory chips, which will help companies such as Micron develop.
Kinngai Chan, Senior Research Analyst at Summit Insights, stated that the amount of DRAM in artificial intelligence PCs may increase by over 30%, and Microsoft's push for users to switch from older versions to Windows 1 may expand the market size, especially in the commercial PC market by 2025.
Micron's performance usually sets the tone for the chip industry, as its financial reports lead its peers and serve a wide customer base in the PC, data center, and smartphone industries.
HBM, high-capacity memory, and data center flash memory, each of these three product categories, will bring in billions of dollars in revenue by 2025, "said Sumit Sadana, Chief Business Officer of Micron.
In the first quarter, the company predicts an adjusted earnings per share of $1.74, fluctuating by 8 cents, while analysts' expectations are $1.65.
It is expected that personal computers integrated with AI technology will have more memory chips, which will help companies such as Micron develop.
Kinngai Chan, Senior Research Analyst at Summit Insights, stated that the amount of DRAM in artificial intelligence PCs may increase by over 30%, and Microsoft's push for users to switch from older versions to Windows 1 may expand the market size, especially in the commercial PC market by 2025.
Micron's performance usually sets the tone for the chip industry, as its financial reports lead its peers and serve a wide customer base in the PC, data center, and smartphone industries.
HBM, high-capacity memory, and data center flash memory, each of these three product categories, will bring in billions of dollars in revenue by 2025, "said Sumit Sadana, Chief Business Officer of Micron.
In the first quarter, the company predicts an adjusted earnings per share of $1.74, fluctuating by 8 cents, while analysts' expectations are $1.65.