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Micron Forecasts Strong Revenue Growth Driven by High AI Memory Chip Demand

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Micron Technology (MU.O) has forecasted a robust third-quarter revenue, exceeding Wall Street estimates, driven by growing demand for its high-bandwidth memory (HBM) chips crucial to artificial intelligence (AI) models. This surge in AI-related demand sent Micron’s shares up by 2% in after-hours trading.

The company highlighted that AI demand is significantly boosting the need for HBM chips, a specialized form of dynamic random access memory (DRAM) vital for advanced AI systems, particularly those powered by Nvidia’s (NVDA.O) processors—one of the major beneficiaries of the AI boom.

Micron’s Chief Business Officer, Sumit Sadana, told Reuters that the company expects continued sequential growth through 2025, driven by increased capacity and market share in HBM production. Notably, Micron’s HBM chips for 2025 are already sold out, reflecting strong demand.

In addition to HBM chips, Micron also provides flash memory NAND chips, with demand expected to rise across both data center and consumer markets. The company forecasts significant profitability improvements for fiscal 2025, which ends in August.

Michael Ashley Schulman, Chief Investment Officer at Running Point Capital, emphasized Micron’s key role in supplying essential memory components for AI infrastructure, noting that the company’s positive outlook underscores its importance in the rapidly expanding AI sector.

Micron’s forecast includes anticipated revenue of $8.80 billion, with a margin of plus or minus $200 million for the third quarter. This exceeds the consensus estimate of $8.5 billion. For the second quarter ending February 27, Micron posted revenue of $8.05 billion, surpassing the $7.89 billion estimate, with earnings per share of $1.56, well above the $1.42 forecast.

However, Micron also acknowledged the uncertainty surrounding potential new tariffs imposed by the Trump administration, stating that it has not factored the potential impact into its forecasts but plans to pass any costs on to customers.

SK Hynix Spurs Rally in Asian Semiconductor Stocks with Mass Production of Advanced AI Chip

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SK Hynix shares surged by over 9% on Thursday after the South Korean chipmaker announced the mass production of a new high-bandwidth memory (HBM) chip designed for AI applications. The company revealed that the HBM3E chip, the first 12-layer version of its kind, will be ready for delivery by the end of the year. This updated chip boasts a 36 GB capacity, marking a 50% increase from the previous 8-layer version, all while maintaining the same physical thickness.

SK Hynix has positioned itself as a key player in the AI memory chip market, supplying HBM chips to major tech firms like Nvidia. With the new 12-layer HBM3E chip, the company seeks to solidify its dominance in the space, offering advanced solutions for high-end generative AI workloads.

HBM chips are dynamic random access memory (DRAM) components that are stacked vertically, allowing for more compact designs and reduced power consumption. The global HBM market is currently dominated by SK Hynix, Micron Technology, and Samsung Electronics.

Micron Technology also made headlines by issuing better-than-expected revenue and profit forecasts for its fiscal first quarter, citing strong demand for HBM chips. Micron expects $8.7 billion in revenue and profits of $1.74 per share, surpassing market estimates. This positive outlook, coupled with SK Hynix’s announcement, led to a rally in Asian semiconductor stocks.

In Japan, Tokyo Electron’s shares rose 7%, and Advantest climbed 5%, while Samsung Electronics saw a 3% gain. The South Korean Kospi index also responded positively, increasing by 2% as the sector benefitted from these developments.