San Francisco, CA – The semiconductor industry is experiencing a resurgence after a recent downturn, with a significant drop in consumer electronics spending due to the pandemic. This downturn hit U.S. memory chipmaker Micron Technology hard, but the company is now experiencing a period of growth. In its most recent quarter (Q2 fiscal 2024), which ended in February 2024, Micron reported a return to profit under GAAP standards, thanks to a rebound in PC and smartphone sales, as well as Nvidia’s AI revolution.
The return to profitability for Micron has implications not only for its stock but also for companies involved in memory chip manufacturing equipment and services, like Lam Research. Additionally, Nvidia and the generative AI infrastructure are set to benefit from Micron’s success. This growth is significant for investors interested in the tech industry.
Micron has reported a 58% year-over-year increase in sales, totaling $5.82 billion in the last quarter. The company is expected to continue this growth trend in fiscal Q3 2024, aiming for revenues of $6.6 billion. Despite this impressive growth, Micron is still recovering from the financial challenges it faced during the previous year.
The company is making strides in manufacturing HBM3e, a high-bandwidth memory used in accelerated computing and AI applications. With Micron’s HBM manufacturing capacity booked out through 2025, there is a strong indication of the demand for high-end memory chips, especially from companies like Nvidia.
Investors have been closely watching Nvidia’s stock, which has seen remarkable growth over the past year. The demand for HBM chips from Micron suggests sustained growth for Nvidia and the broader tech industry. While this growth trend is positive, there are considerations regarding the sustainability of this momentum and the market dynamics in the semiconductor industry.
Despite the current positive trajectory, it is essential for investors to conduct thorough research before investing in companies like Micron Technology. The tech industry is dynamic, and factors like market demand, competition, and innovation can impact the performance of companies in the semiconductor sector. As Micron and Nvidia continue to grow, it will be interesting to see how these developments shape the landscape of the industry moving forward.