MU - Micron: HBM Technology Breakthrough But Fairly Valued

2024-02-06 03:45:28 ET

Summary

• Micron's revenue could be impacted by Chinese regulations, but the company may benefit from market pricing recovery and price increases.
• Micron has a 10% share in the HBM memory market, trailing behind Samsung and SK Hynix.
• Micron's competitiveness in HBM3e could position it well to capture market share and increase its share from 5% in 2023 to 23% in 2026.

In our previous assessment of Micron ( MU ), we anticipated that new Chinese regulations could impact Micron's revenue by 5.6% to 25%, with our base case aligning with Micron's guidance at an 11.3% revenue reduction. Despite potential benefits for competitors like Samsung and SK Hynix, Chinese chipmakers, particularly YMTC in NAND, could exploit the ban, against Micron. Though pricing may experience minimal impact, we anticipated market pricing recovery with Micron already implementing price increases....

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