What’s going on here?
Micron Technology slightly increased its 2024 capital expenditure forecast to around $8 billion, driven by investments in high bandwidth memory (HBM) semiconductors for AI applications.
What does this mean?
Micron Technology, based in Boise, Idaho, is one of the top three suppliers of HBM chips, crucial for AI servers. The company’s state-of-the-art HBM3E chips will power Nvidia’s H200 chips. As of March, Micron’s entire 2024 inventory of HBM chips – vital for AI development – was sold out, with a significant portion of 2025’s supply already pre-allocated. Micron is ramping up production from current eight-layer HBM chips to 12-layer variants. CFO Matt Murphy announced the $8 billion capex forecast, up from an earlier $7.5 billion estimate, emphasizing HBM’s potential to be a multibillion-dollar segment by fiscal 2025. Despite this optimism, Micron shares fell by about 3% amid a generally weak market, although the
stock
was up 51% for the year as of last Monday.
Why should I care?
For markets: The tech tumble.
Micron’s stock dipped 3% despite positive forecasts, reflecting broader market
volatility
. Even with this setback, its shares have surged 51% this year, highlighting robust investor confidence. Keeping an eye on semiconductor stocks like Micron could offer insights into future growth areas, particularly if AI demand continues to spike.
The bigger picture: AI is the future.
AI is driving substantial demand for advanced HBM semiconductors, a trend Micron aims to capitalize on. The company’s expansion in HBM chip production aligns with escalating global tech demands. Expect geopolitical and economic shifts to influence this sector, as nations ramp up investments in AI and related technologies.