Latest news with #HBM3E
Business Insider
6 days ago
- Business
- Business Insider
AI Boom Pushes Micron Stock (MU) Towards $145 Price Target
When I first invested in Micron (MU) earlier this year, my expectations were optimistic. Although the stock has appreciated to around $95, representing approximately a 30% return since my purchase, I believe this is only the beginning of its potential growth. Future gains are likely to be driven by the expanding opportunities in artificial intelligence. Consequently, I have set a price target of $145 over the next 12 months. Confident Investing Starts Here: While this may appear ambitious, Micron's role as a key supplier of critical memory technologies in the AI sector positions it as a stable, cyclical investment. Micron's business has historically exhibited cyclical characteristics; however, unlike previous cycles, the company has now firmly established itself at the forefront of the AI revolution. With strategic partnerships involving leading industry players such as Nvidia (NVDA) and a strong financial foundation, Micron offers a broader potential return horizon than in the past. Micron's HBM3E Is a Catalyst for AI One of the key reasons I am optimistic about Micron is the rapid growth of High Bandwidth Memory (HBM). AI systems that power platforms like ChatGPT and NVIDIA's latest GPUs require high-performance memory capable of transferring large volumes of data at exceptional speeds. Micron's latest product, HBM3E, meets these demanding requirements and is already being integrated into NVIDIA's flagship AI systems. The advanced speed and performance of HBM3E position Micron at the center of a fast-growing market segment focused on running complex AI models and applications. In fact, Micron has already fully booked its 2025 production capacity for these HBM chips, reflecting robust demand. This is not merely a short-term surge. The HBM market is projected to grow significantly and become a substantial part of overall DRAM sales. Industry analysts estimate HBM will represent approximately 15% of DRAM sales in 2024—about double its share from 2023. Micron anticipates the HBM market will reach over $35 billion by 2025, surpassing earlier projections. This sustained, structural growth driven by AI gives me confidence that Micron is positioned for a long-term growth trajectory rather than a temporary upswing. Strong Financial Performance Underpins the Bull Case Micron's recent financial performance strongly supports my bullish outlook. In the second quarter of Fiscal 2025, the company reported revenues of $8.05 billion, marking a robust 38% year-over-year increase. Earnings per share reached $1.41, reflecting a significant recovery from the previous year and demonstrating solid operational progress and growing demand across business segments. These results exceeded market expectations, indicating strong underlying momentum. Looking ahead, Micron's financial outlook remains promising. Analyst projections anticipate earnings per share to rise substantially from approximately $7 in Fiscal 2025 to around $11 in Fiscal 2026. Even under a more conservative scenario of $8.00 per share in Fiscal 2026, Micron's current valuation at roughly 13 times forward earnings remains attractive given its growth trajectory. Applying a conservative multiple of 18 times forward earnings supports my target price of $145, suggesting meaningful upside potential from current levels. Don't Take Your Eye Off the Ball As with any investment, Micron faces several risks. The memory market is highly competitive, with major players like Samsung (SSNLF) and SK Hynix aggressively pursuing the AI memory segment. SK Hynix, notably NVIDIA's current HBM memory supplier, sets a high standard that Micron is working hard to match. Monitoring the pace of technological advancements remains critical. Geopolitical factors also present significant challenges. Past tensions between the United States and China have resulted in restrictions on Micron's chip sales to China. Any further deterioration in relations or expanded limitations on Micron's access to the Chinese market could negatively impact the company's revenue and profitability, given China's market importance. Lastly, while the current favorable environment for semiconductor memory driven by AI demand is strong, it is likely to eventually give way to oversupply or softened demand, which could pressure Micron's margins and revenues. That said, due to the structural growth driven by AI, I expect the next downturn to be less severe than in previous cycles. What is the Price Target for MU Stock in 2025? On Wall Street, Micron has a consensus Strong Buy rating based on 20 Buys, three Holds, and zero Sells. The average MU stock price target is $124.71, indicating almost 30% upside potential over the next 12 months. Micron (MU) Remains a Cheap Buy In summary, although my Micron investment has already gained around 30%, I remain very optimistic. Micron's strong strategic position in the AI-driven memory market, combined with its financial turnaround and key partnerships with NVIDIA, suggests significant growth potential ahead. The market has yet to fully reflect the earnings growth that AI is likely to generate for Micron in the coming years. While competition and geopolitical risks are real, Micron remains attractively valued. I believe that investors entering at today's price of about $95 have a solid opportunity to achieve strong returns over the next 12 months, despite the usual market fluctuations.
Korea Herald
21-05-2025
- Business
- Korea Herald
Nvidia backs SK hynix in AI chip push at Computex
Nvidia CEO Jensen Huang made a surprise visit to SK hynix's booth at Computex 2025, expressing strong support for their partnership on critical AI memory chips at the major trade show, which kicked off Tuesday in Taiwan. At the booth, where SK hynix showcased a sample of its sixth-generation high-bandwidth memory or HBM 4 chip, Huang examined the prototype and remarked, 'So beautiful.' He also left handwritten messages on the displayed samples, including 'JHH LOVES SK HYNIX!' and 'One team!' His remarks are seen as a reaffirmation of the close ties between the two companies. SK hynix's HBM4 sample was exhibited alongside Nvidia's next-generation Blackwell GB200 chip. SK hynix is currently the main supplier of HBM3E, the latest generation HBM chip that plays a critical role in powering Nvidia's advanced AI processors. During the visit, Huang asked Kim Joo-sun, SK hynix president in charge of AI infrastructure, to 'support HBM4 well.' SK hynix was the first in the industry to begin mass production of 8-layer HBM3E in March last year, followed by 12-layer HBM3E in September. In March this year, it became the first to deliver samples of its sixth-generation 12-layer HBM4, giving it an early lead in the race for next-generation HBM market dominance. For SK hynix, Nvidia is a key customer. According to the chipmaker's consolidated earnings report, a single company accounted for an estimated 27.1 percent of SK hynix's first-quarter revenue, roughly 4.79 trillion won ($3.45 billion), which industry officials believe to be Nvidia. HBM technology also took center stage at Computex 2025. In his keynote speech, MediaTek CEO Rick Tsai emphasized the importance of HBM4 and HBM4E, which are expected to enter the market next year. As demand rises for chips with higher performance and lower power consumption, Tsai noted that the increasing complexity in designing and manufacturing HBM presents significant challenges for chipmakers, and stressed that key industry players must collaborate closely to meet those demands.
Korea Herald
16-05-2025
- Business
- Korea Herald
SK hynix's US sales make up over 70% in Q1 on rising AI demand
Chip giant SK hynix Inc. has reported that its US sales accounted for over 70 percent of its total revenue in the first quarter on rising demand for premium high bandwidth memory chips from major US tech companies. According to the company's financial report released Thursday, revenues in the United States totaled 12.8 trillion won ($9.1 billion) in the first quarter, representing 72 percent of the company's total quarterly sales of 17.6 trillion won. Its US sales amounted to 6.3 trillion won a year ago, accounting for a 50 percent portion. The sharp rise is attributable to increasing sales of artificial intelligence products, including HBM and enterprise solid state drives, in the US SK hynix, a global leader in the HBM market, has already sold out this year's HBM production, supplying its 12-layer HBM3E product to major customers, including Nvidia Corp. Meanwhile, sales in China dropped to 2.7 trillion won, accounting for 15 percent of quarterly revenue, down from 18 percent in the same period last year. (Yonhap)
Irish Independent
01-05-2025
- Business
- Irish Independent
Samsung executives warn of trade uncertainty as demand for chips softens
Executives at the chips-to-smartphones titan warned of heightened uncertainty for the rest of the year stemming from geopolitical tensions and US tariff policies. Even before US president Donald Trump announced tariffs on almost all countries around the world, customers put some data centre projects on hold, weakening demand for Samsung's solid-state drives in the March quarter, an executive from the company's memory business told analysts. Samsung's total capital expenditure in the quarter fell more than 30pc from the previous quarter to 12 trillion won (€7.4bn). The South Korean company's flagship products such as semiconductors, smartphones and tablets are now exempt from the so-called reciprocal tariffs, but Mr Trump has indicated that a tariff on the electronics supply chain including chips is in the works. 'There are a lot of uncertainties ahead of us,' said KL Roh, an executive vice president at Samsung. Operating profit at Samsung's chip division tumbled 42pc to 1.1 trillion won due to declines in average selling price. Sales of its key high-bandwidth memory chips also fell due to export controls, with some clients also deferring orders in anticipation of upcoming enhanced HBM3E products, according to Samsung. In recent high-profile trade talks, Seoul and Washington agreed to pursue a comprehensive package agreement by July 8, when the 90-day tariff pause is set to end. Fears about what the final trade agreement would look like hang over Samsung's outlook, outweighing a boost from customers stockpiling PC chip supplies ahead of US tariffs and a recovery in smartphone sales. Donald Trump Jr was in Seoul yesterday to meet with leaders of Korean conglomerates on the invitation of Shinsegae Group chairman Chung Yong-jin, underscoring escalating concern in the country's business community. Korean business leaders had asked Mr Chung to facilitate the visit to establish contact with the Trump administration, according to local reports. Customers from Apple to Lenovo Group hastened shipments of consumer products to the US over the first quarter of the year to preempt tariffs. Samsung's own Galaxy S25 flagship smartphone series also buoyed earnings. That helped boost net income to 8.03 trillion won, above estimates. But such one-time pre-tariff gains have done little to assuage concern about long-term demand. Analysts including Canalys see the first-quarter surge in shipments as an acceleration of deliveries from later in the year.
Yahoo
30-04-2025
- Business
- Yahoo
Samsung profit slows after US-China trade war hits AI spending
(Bloomberg) — Samsung Electronics Co. ( reported slower profit growth and softening demand for storage chips, a sign that the US-China trade war may be triggering cuts in artificial intelligence hardware spending. New York City Transit System Chips Away at Subway Fare Evasion NYC's Congestion Toll Raised $159 Million in the First Quarter The Last Thing US Transit Agencies Should Do Now At Bryn Mawr, a Monumental Plaza Traces the Steps of Black History At the National Public Housing Museum, an Embattled Idea Finds a Home Executives at the chips-to-smartphones titan warned of heightened uncertainty for the rest of the year stemming from geopolitical tensions and US tariff policies. Even before US President Donald Trump announced tariffs on almost all countries around the world, customers put some data center projects on hold, weakening demand for Samsung's solid-state drives in the March quarter, an executive from the company's memory business told analysts on Wednesday. Samsung's total capital expenditure in the quarter fell more than 30% from the previous quarter to 12 trillion won ($8.4 billion). The South Korean company's flagship products such as semiconductors, smartphones and tablets are now exempt from the so-called reciprocal tariffs, but Trump has indicated that a tariff on the electronics supply chain including chips is in the works. 'There are a lot of uncertainties ahead of us,' said KL Roh, an executive vice president at Samsung. Operating profit at Samsung's chip division tumbled 42% to 1.1 trillion won due to declines in average selling price. Sales of its key high-bandwidth memory chips also fell due to export controls, with some clients also deferring orders in anticipation of upcoming enhanced HBM3E products, according to Samsung. Its shares were down about 0.5% Wednesday afternoon in Seoul. In recent high-profile trade talks, Seoul and Washington agreed to pursue a comprehensive package agreement by July 8, when the 90-day tariff pause is set to end. Fears about what the final trade agreement would look like hang over Samsung's outlook, outweighing a boost from customers stockpiling PC chip supplies ahead of US tariffs and a recovery in smartphone sales. Donald Trump Jr. was in Seoul on Wednesday to meet with leaders of Korean conglomerates on the invitation of Shinsegae Group Chairman Chung Yong-jin, underscoring escalating concern in the country's business community. Korean business leaders had asked Chung to facilitate the visit to establish contact with the Trump administration, according to local reports. 'Samsung is planning to ramp up the enhanced 12-layer HBM3E product in the second quarter to meet demand from some clients,' said Greg Noh, an analyst with Hyundai Motor Securities Co. ( 'But unless there is demand from Nvidia (NVDA), it's difficult to expect dramatic improvement in the chip business.' Customers from Apple Inc. (AAPL) to Lenovo Group Ltd. (LNVGF, LNVGY) hastened shipments of consumer products to the US over the first quarter of the year to preempt tariffs. Samsung's own Galaxy S25 flagship smartphone series also buoyed earnings. That helped boost net income to 8.03 trillion won, above estimates. But such one-time pre-tariff gains have done little to assuage concern about long-term demand. Analysts including Canalys see the first-quarter surge in shipments as an acceleration of deliveries from later in the year — and any intensification in US-China tensions could put more pressure on global trade. Samsung has struggled for months to secure Nvidia Corp.'s final nod for its most advanced HBM products, which are today the most lucrative segment for memory makers. Icheon-based SK Hynix Inc. ( retains the top position in providing these chips enabling AI accelerators. That catch-up effort continues to eat away at Samsung's earnings. It spent 9 trillion won in research and development in its fiscal first quarter, up 16% from a year ago. Samsung said it has shipped its enhanced HBM3E samples to major customers and expects that product line to contribute to revenue starting in the second quarter. The company also forecast HBM sales to bottom out in the first quarter and gradually recover, helped by its improved HBM3E. For the next-generation HBM4, it maintained its target to begin mass production in the second half of the year, and said it's in talks with multiple clients for HBM4. Within Samsung's semiconductor division, the contract chipmaking business has struggled, weighed down by a lack of significant orders from major clients. This has made it harder to compete with Taiwan Semiconductor Manufacturing Co., which held a dominant share of almost two thirds of the global foundry market in the third quarter of 2024, according to Taipei-based TrendForce. Samsung's share stood at 9.3%. The foundry business posted a loss due to lower utilization rates and high fixed costs. However, the company expects a gradual recovery in demand, which should improve utilization and help narrow losses in the second half. Samsung's foundry arm now aims to begin mass production using 2-nanometer processes in the June quarter, a key step in its bid to catch up to TSMC and capture some of the high-end logic chipmaking business. —With assistance from Vlad Savov. (Updates with quotes from executives from third paragraph) Made-in-USA Wheelbarrows Promoted by Trump Are Now Made in China As More Women Lift Weights, Gyms Might Never Be the Same Why US Men Think College Isn't Worth It Anymore Eight Charts Show Men Are Falling Behind, From Classrooms to Careers The Mastermind of the Yellowstone Universe Isn't Done Yet ©2025 Bloomberg L.P. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Sign in to access your portfolio
