Micron Technology, a leading memory chip maker, has forecasted fourth-quarter revenue that surpasses Wall Street estimates, driven by strong demand for its high-bandwidth memory (HBM) chips used in artificial intelligence data centers. The company reported a nearly 50% increase in third-quarter sales of its HBM chips from the previous quarter and has announced plans to continue investing in these chips.
The surge in demand for AI chips, such as those from Nvidia and Advanced Micro Devices, has contributed to Micron’s success, as both companies utilize Micron’s memory chips in their products. Additionally, cloud companies like Google have made significant investments in AI infrastructure expansion this year, further fueling the demand for AI-related products.
Despite concerns about tariff-related pull-ins from customers in the third quarter, Micron’s Chief Business Officer, Sumit Sadana, remains optimistic about the company’s future prospects. He expressed confidence in healthy demand for the second half of the calendar year and expects Micron’s market share in HBM chips to grow to match its overall share for dynamic random access memory (DRAM) chips by the second half of calendar 2025.
Micron faces competition in the high-bandwidth memory chip market from South Korea’s SK Hynix and Samsung. To strengthen its position in this competitive landscape, Micron introduced a new business segment in April called the “cloud memory business unit.” This unit will focus on providing products to hyperscalers and developing HBM chips that can efficiently handle data-intensive AI tasks.
In terms of financial performance, Micron expects fourth-quarter revenue to be around $10.7 billion, plus or minus $300 million, exceeding analysts’ average estimate of $9.88 billion. For the third quarter, the company reported revenue of $9.30 billion, surpassing estimates of $8.87 billion. Earnings per share for the third quarter stood at $1.91, higher than analysts’ average estimate of $1.60.
Overall, Micron’s positive outlook, strong financial performance, and strategic investments in AI-related products position the company for continued success in the rapidly growing semiconductor industry. With a focus on innovation and meeting the evolving needs of its customers, Micron is poised to maintain its competitive edge in the market.
This article was reported by Harshita Mary Varghese in Bengaluru and Stephen Nellis in San Francisco, with editing by Shinjini Ganguli.
