AI Bubble Bursts: Tech Giants Stumble as Micron’s Surge Sends Shockwaves Through the Industry
- American Micron Technology, a key indicator of the memory semiconductor market, has exceeded market expectations with its performance this quarter.
- According to Micron's announcement on the 26th, the company recorded sales of $7.75 billion (approximately KRW 10 trillion) and operating profit of $1.522 billion in the fourth quarter...
- Micron's future performance projections also exceeded expectations.
Micron Technology Exceeds Market Expectations with Strong AI Demand
Strong AI Demand Boosts Micron’s Performance
American Micron Technology, a key indicator of the memory semiconductor market, has exceeded market expectations with its performance this quarter. This is due to stronger-than-expected demand for artificial intelligence (AI).
According to Micron’s announcement on the 26th, the company recorded sales of $7.75 billion (approximately KRW 10 trillion) and operating profit of $1.522 billion in the fourth quarter of 2024 (June to August). These figures represent a 14% and 112% increase, respectively, over the previous quarter.
Future Performance Projections Exceed Expectations
Micron’s future performance projections also exceeded expectations. The company predicted first-quarter (September to November this year) sales to be around $8.7 billion, comfortably beating market forecasts of $8.27 billion.
Regarding industry conditions next year, Micron stated that it expects demand growth for both DRAM and NAND to be in the mid-10% range. This growth is driven by the increasing demand for expanding data centers, fueled by artificial intelligence.
Artificial Intelligence Drives Demand for Memory Semiconductors
The demand for artificial intelligence technology is stronger than initially feared. Not only high-bandwidth memory (HBM) but also general DRAM and NAND are greatly benefiting from artificial intelligence.
Micron’s ‘surprising performance’ in the fourth quarter was led by NAND products used in artificial intelligence data centers. The ‘storage business unit’ (SBU), which mainly includes NAND-based storage devices (SSD), recorded sales of $1.681 billion, up 24% from the previous quarter.
Pessimism Subsides as Micron’s Performance Boosts Market Confidence
As a result, pessimism led by US investment bank Morgan Stanley is expected to subside for the time being. Micron’s performance has given the market more confidence, and Samsung Electronics and SK Hynix are rated as having been given a ‘green light’ for their performance from the second half of the year.
Expectations are high for Hynix, which is benefiting greatly from the artificial intelligence craze as the leader in high-bandwidth memory. Performance improvements at Samsung Electronics may be more gradual than at Hynix.
Market Responds to Micron’s Strong Performance
The market has responded positively to Micron’s performance. Micron jumped more than 14% in after-hours trading on the New York Stock Exchange on the 25th (local time) compared to the day’s regular market close.
Samsung Electronics and SK Hynix also rose 4.0% and 9.4% respectively in the stock market on the 26th.