Micron, the third largest DRAM company in the US, has announced its plans to enter the high bandwidth memory (HBM) market in an effort to compete with Korean semiconductor giants SK Hynix and Samsung Electronics. While Micron failed to make an impact in the HBM competition thus far, the company aims to skip the current generation of HBM chips and focus on delivering higher performance chips starting next year.
According to Micron’s chief business officer Sumit Sadhana, samples of the next generation HBM3E have already been sent to leading player Nvidia for testing, and the results have been promising. Micron claims that their HBM3E product, developed using advanced packaging technology, outperforms competitors’ products. The company plans to begin mass production of HBM3E in early 2024, with CEO Sanjay Mehrotra expecting significant sales in the fiscal year.
Micron’s entry into the HBM market poses a threat to Samsung Electronics and SK Hynix, as it could alleviate the current supply shortage and increase price competition among the companies. The fact that Micron is an American company raises the possibility that major players like Nvidia and AMD may prefer their chips. Notably, Apple has already applied Micron’s low power DRAM to its latest iPhone.
While Micron reported an annual loss of $1.472 billion in the fourth quarter of fiscal year 2023, the deficit has been decreasing for two consecutive quarters. Sales of flagship DRAM and NAND flash products have also increased compared to the previous quarter. However, Micron’s forecast for the first quarter of fiscal year 2024 indicates a net loss per share of $1.07, leading to a drop in stock price.
Despite the challenges, Micron remains optimistic about the future of the memory semiconductor industry. The company predicts an increase in demand bit growth in fiscal year 2024, while supply remains limited due to production cuts by major players. Micron believes that semiconductor inventories have returned to normal levels for PC, smartphone, and car customers, and expects the demand for server DRAM to normalize in early 2024. With decreased supply and increased demand, Micron predicts an improvement in price and profitability in the coming years, particularly as the demand for AI technology continues to grow.
To prepare for the industry’s rebound, Micron is in the process of converting equipment to produce more advanced products. This will reduce the production of older products and overall supply of DRAM and NAND flash. Micron anticipates that demand for cutting-edge products will exceed supply in the second half of fiscal year 2024.
Overall, Micron’s entry into the HBM market and its optimistic outlook for the memory semiconductor industry in the coming years have the potential to shake up the market and pose a challenge to established players. With its focus on high-performance chips and advanced technology, Micron aims to carve out a significant share of the growing demand for memory products.
industry
Entered 2023.09.28 10:27 Modified 2023.09.28 13:57
Pride of American Micron memory
Full launch of ‘HBM’ high value-added DRAM
“nvidia samples…provided a positive response”The recovery of the memory industry in 2024
Reduction in customer inventory to normal level
“AI will drive demand for memory”
Micron CEO Sanjay Mehrotra (third from left) explains the current status of the business to US President Joe Biden (second from left) at an event to commemorate Micron’s investment in New York held in October last year. / Yonhap News The hot topic in the memory semiconductor industry recently by far. It is high bandwidth memory (HBM). It is a product that increases the speed and capacity of data processing by stacking multiple DRAMs, and is applied to AI data centers along with graphics processing units (GPUs). As productive artificial intelligence (AI) technology, which has high demand for data processing, spreads, orders for HBM are pouring in. The latest product is the 4th generation ‘HBM3’, and SK Hynix dominates the market and supplies it to NVIDIA. NVIDIA packages its GPU with HBM3 (making it work as a single chip) and provides it to server companies. Samsung Electronics is also preparing to supply HBM3 to Nvidia and others.
Micron, the third largest DRAM company in the US, failed to make a mark in the HBM competition. The leadership was given to SK Hynix and Samsung Electronics. This is expected to change in the future. Micron expressed its intention to ‘actively target the HBM market’ in its earnings announcement for the fourth quarter (June-August) of the 2023 financial year on the 27th (local time). This foreshadows competition with Korean semiconductor companies.
Skipping HBM3 and pursuing HBM3E delivery to NVIDIA
Sumit Sadhana, Micron’s chief business officer, said in an interview with Reuters on this day, “We are implementing a strategy to make a profit by skipping the current generation of HBM chips and instead selling higher performance chips starting next year.” “We sent samples to customers and found they performed well compared to competitors’ samples,” he said. higher performance.” The customer mentioned by Micron is Nvidia, one of the major HBM players.
To sum up the words of Sadhana CBO, he acknowledged that he is behind SK Hynix and Samsung Electronics regarding HBM3, which is mainly used in the industry recently. However, for the next generation HBM3E, samples have been sent to NVIDIA for testing, and NVIDIA has said that it surprisingly exceeds the performance of competitors’ products. Micron also emphasized in today’s performance data, “We have developed the industry’s best HBM3E product using 1b technology (12-13nm) and advanced packaging technology,” and added, “We will start production of HBM3E in early 2024 and record meaningful sales.” . CEO Sanjay Mehrotra added, “We expect to generate hundreds of millions of dollars worth of sales with HBM3E in fiscal 2024.” HBM3E was developed by SK Hynix last August. Provided by SK Hynix Micron’s active entry into the HBM market is evaluated as a negative factor for Samsung Electronics and SK Hynix. This is because the HBM supply shortage is being alleviated and the possibility of price competition between companies is increasing. Given that Micron is an American company, the possibility that NVIDIA, AMD, etc. would prefer Micron cannot be ruled out. It is known that Apple from the United States, together with Samsung Electronics, applied 1b LPDDR5 Micron (low power DRAM for mobile devices) to the iPhone 15.
Shares fall on the forecast of a net loss that exceeds consensus
On this day, Micron announced that it recorded sales of $4.01 billion, an annual loss of $1.472 billion (about 2 trillion won), and a net loss per share of $1.31 in the fourth quarter of fiscal year 2023. Although it failed to turn profit, the deficit fell for two consecutive quarters. Sales of flagship DRAM and NAND flash products also increased compared to the previous quarter.
The forecast for the first quarter of fiscal 2024 (September to November) was presented as sales of $4.2 billion to $4.6 billion and a net loss per share of $1.07. Micron’s stock price fell about 3% after the earnings announcement due to a more negative outlook than the average loss of $0.95 per share predicted by securities firms.
“Recovery of the memory semiconductor industry in 2024″…positive for Samsung and SK too
Executives’ comments about the industry were not negative. While macroeconomic risks will remain, Micron anticipates that demand bit growth (growth rate converted to pieces) will increase compared to the previous year in fiscal year 2024 (September 2023 to August 2024). On the other hand, supply in the market does not increase. This is because the supply of DRAM and NAND flash to the market has decreased due to production cuts by Samsung Electronics, SK Hynix, and Micron. Micron predicted that this trend will continue in 2024. Micron’s opinion is that the semiconductor inventories of personal computer, smartphone and car customers, which was of interest, has almost returned to ‘normal levels’. It has also been said that the demand for server DRAM, which is a concern, is likely to normalize in early 2024. In summary, in a situation where supply has decreased and demand has increased, this means that customers who has cleared inventory resuming DRAM orders . CEO Sanjay Mehrotra predicted, “Price and profitability will continue to improve in fiscal 2024,” and “sales recovery will be more pronounced in 2025 due to the spread of AI.”
Micron is in the process of converting equipment from its older product line to a more advanced product line. This will reduce production of older products and reduce the overall supply of DRAM and NAND flash. At the same time, the capacity to produce cutting-edge products will increase, allowing us to respond quickly when the industry rebounds in the future. Micron emphasized, “Beginning in the second half of fiscal 2024, demand for cutting-edge products will exceed our supply.”
Correspondent Hwang Jeong-su hjs@hankyung.com
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