Core Viewpoint - The rapid development of AI has made storage a critical component in the AI infrastructure, alongside computing power. The demand for storage is surging due to the increasing data volume and inference scenarios driven by large models and generative AI. Three storage technologies—HBM, HBF, and GDDR7—are redefining the future landscape of AI infrastructure [1]. Group 1: HBM (High Bandwidth Memory) - HBM has evolved from a high-performance AI chip component to a strategic point in the storage industry, significantly impacting AI chip performance limits. In less than three years, HBM has achieved over twofold capacity and approximately 2.5 times bandwidth increase [3]. - SK Hynix is leading the HBM market, currently in the final testing phase for the sixth generation (HBM4) and has announced readiness for mass production. In contrast, Samsung is facing challenges in HBM4 supply to Nvidia, with a two-month delay in testing [3][5]. - A notable trend is the customization of HBM, driven by cloud giants developing their AI chips. SK Hynix is shifting towards a fully customized HBM approach, collaborating closely with major clients [4]. Group 2: HBF (High Bandwidth Flash) - HBF aims to address the limitations of traditional storage by combining the capacity of NAND flash with the bandwidth of HBM. Sandisk is leading the development of HBF technology, which is expected to meet the growing storage demands of AI applications [8][9]. - HBF is seen as complementary to HBM, suitable for specific applications requiring large block storage units. It is particularly advantageous in scenarios demanding high capacity but with relatively relaxed bandwidth requirements [10][11]. Group 3: GDDR7 - Nvidia's introduction of the Rubin CPX GPU, utilizing GDDR7 instead of HBM4, reflects a new approach to AI inference architecture. This design optimizes resource allocation by separating the inference process into two stages, effectively utilizing GDDR7 for context building [13]. - The demand for GDDR7 is increasing, with Samsung successfully meeting Nvidia's orders. This flexibility positions Samsung favorably in the graphics DRAM market [14]. - GDDR7's cost-effectiveness may drive the widespread adoption of AI inference infrastructure, potentially increasing overall market demand for high-end HBM due to the proliferation of applications [15]. Group 4: Industry Trends and Future Outlook - The collaborative evolution of storage technologies is crucial for the AI industry's growth. HBM remains essential for high-end training and inference, while HBF and GDDR7 cater to diverse market needs [23]. - The ongoing innovation in storage technology will accelerate as AI applications expand across various sectors, providing tailored solutions for both performance-driven and cost-sensitive users [23].

Core Viewpoint - The article discusses the explosive growth potential in the memory market, driven by AI and data center demands, highlighting a "super cycle" in memory pricing and production, particularly for DRAM, HBM, and NAND [2][11][23]. Market Trends - The storage market is experiencing upward trends, with significant price increases in DDR and NAND due to supply chain disruptions and rising demand from AI applications [2][8]. - Recent reports indicate that Micron has raised its server shipment growth forecast for 2025 to approximately 10%, driven by increased demand for AI agents and traditional server workloads [9]. - TrendForce predicts a 5-10% average price increase for NAND Flash products in Q4 due to supply shortages and rising demand from cloud service providers [10]. Price and Profitability Drivers - Key drivers of the current memory super cycle include: 1. Explosive demand for AI and data centers, with traditional server capital expenditures expected to grow by 20-30% by 2026, leading to a 50% increase in DDR4/DDR5 memory demand [14]. 2. Profit margins for DRAM are projected to rise from 40-50% to nearly 70% by 2026, while NAND margins are expected to improve from breakeven to 30-40% [14]. Demand Surge Factors - The recent surge in storage demand is attributed to the transition of AI applications from an "accumulation phase" to a "high penetration phase," significantly increasing user interaction and data generation [19]. - The upgrade in AI technology logic has also amplified the need for DRAM and NAND, with token consumption increasing dramatically due to more complex interactions and multi-modal data processing [20]. - Companies are restructuring their AI infrastructure to implement a tiered storage system, which is driving immediate demand for DRAM and NAND products [21]. Future Outlook - The AI-driven super cycle is expected to last at least until 2027, with potential downturns anticipated in 2028 [23]. - Ongoing negotiations between DRAM manufacturers and NVIDIA regarding HBM pricing are likely to favor DRAM manufacturers, potentially leading to higher growth predictions for the HBM market [25]. Technological Developments - NVIDIA's introduction of the CPX solution is expected to create differentiated demand across storage products, potentially increasing GDDR7 demand while impacting HBM4 negatively in the short term [27]. - NVIDIA is also developing HBF (High Bandwidth Flash) as a cost-effective alternative to HBM, indicating a strategic shift in memory resource allocation [28].

Summary of J.P. Morgan Global Memory Market Conference Call Industry Overview - The conference call focused on the **Global Memory Market**, particularly the **semiconductor** sector, highlighting the increasing demand for memory driven by data center compute needs and the AI boom [3][38]. Key Insights 1. **Memory Market Growth**: - The memory Total Addressable Market (TAM) is expected to grow by **6%-24%**, reaching approximately **$300 billion** by FY27E, primarily driven by High Bandwidth Memory (HBM) and new applications like SOCAMM2 and GDDR7 [3][38]. - The **DRAM pricing upcycle** is anticipated to last from **2024 to 2027**, marking an unprecedented four-year cycle [3][55]. 2. **High Bandwidth Memory (HBM)**: - HBM value share is projected to account for **43%** of the DRAM market by **2027** [3][55]. - The blended HBM Average Selling Price (ASP) is expected to rise in FY26E, supported by a **35% pricing premium** for HBM4 [3][39]. - HBM TAM is forecasted to reach **$90 billion** by FY27E, with a tight supply-demand balance expected throughout the year [3][39]. 3. **NAND Market Dynamics**: - NAND pricing is expected to increase by **7%** in FY26E due to recovering demand and HDD shortages [4][40]. - The transition from HDD to eSSD is becoming more prevalent, particularly for AI applications, which is expected to drive NAND demand [4][40]. 4. **Capex and Capacity Expansion**: - Memory capital expenditures (capex) are projected to rise by **7%-12%** in FY26-27E to meet increasing demand [5][41]. - DRAM capacity expansion is prioritized over NAND due to better economic prospects associated with HBM [5][41]. 5. **Stock Performance and Valuation**: - Memory stocks have surged, with the top three memory makers valued at **$734 billion** in 2025E, with potential upside to **$1 trillion** based on historical trading multiples [6][54]. - Current stock valuations are seen as slightly above forward-looking revenue, indicating potential for further growth [6][54]. 6. **AI Demand Impact**: - AI applications are expected to represent over **50%** of DRAM TAM by 2027E, with HBM being a significant contributor [28][38]. - The demand for memory is broadening across all applications, necessitating upgrades to lower latency and more efficient memory solutions [8][38]. Additional Considerations - The memory market is experiencing a **structural shift** due to the increasing importance of HBM and AI applications, which may not align with historical memory cycle patterns [55]. - The competitive landscape is evolving, with companies like SK Hynix (SKH) positioned favorably for HBM4 qualifications, while SEC and Micron (MU) are expected to compete for market share [3][56]. This summary encapsulates the critical insights from the J.P. Morgan conference call regarding the global memory market, emphasizing growth prospects, pricing dynamics, and the impact of AI on memory demand.

V i e w p o i n t | 22 Sep 2025 06:17:00 ET │ 10 pages Global Semiconductors Memory Pricing Update: Raising 4Q25E & 2026E ASP Growth Estimates on Multiple Tailwinds from Commodity Memory CITI'S TAKE Digitimes reported (17-Sep) that 4Q25E memory contract price increased +15~20% QoQ due to supply shortages and aggressive memory procurement by CSPs. However, while we see negotiations for 4Q contract pricing likely settling in late-Sep, we project 4Q25E DRAM/NAND ASP growth to register +12%/+6% QoQ (vs. +5%/3% ...

Core Viewpoint - The DRAM market is experiencing price increases due to supply constraints and shifting demand towards high-end applications, particularly Server DRAM and HBM, while traditional PC and mobile applications face reduced capacity allocation [1][3]. DRAM Price Trends - Overall Conventional DRAM prices are expected to increase by 8-13% in Q4, with HBM blended prices rising by 13-18% [1][2]. - PC DRAM prices are anticipated to rise slightly due to limited supply as major OEMs reduce procurement volumes [3]. - Server DRAM demand is expected to grow significantly, with U.S. CSPs planning to start procurement earlier to secure supply, leading to price increases [3]. Mobile and Graphics DRAM - Mobile DRAM prices, particularly LPDDR4X, are projected to increase by over 10% in Q4 due to supply constraints and inventory buildup by manufacturers [4]. - Graphics DRAM demand remains strong, with GDDR7 prices expected to rise more than in the previous quarter due to anticipated supply shortages [4]. Consumer DRAM - Consumer DDR4 supply is limited, and despite previous price increases, demand has softened, leading to a forecasted moderation in price growth for Q4 [5]. - DDR3 prices are expected to continue rising due to preemptive stocking and supply constraints [5].

Group 1 - Morgan Stanley highlights that the AI boom is driving a "super cycle" in the storage industry, predicting upward momentum will extend into the second half of next year, benefiting South Korean chipmakers [1][2] - Samsung Electronics is reportedly increasing prices for DRAM and NAND flash storage in Q4, with DRAM prices expected to rise by 15%-30% and NAND by 5%-10% [2] - Demand for enterprise solid-state drives (eSSD) is surging, with order volumes for eSSD expected to match this year's total, leading to a projected 8% supply shortage for NAND next year [1][2] Group 2 - The average price of DRAM in Q4 is anticipated to be 9% higher than current levels, driven by demand from cloud server chips [2] - Morgan Stanley has upgraded the investment rating for South Korean semiconductor manufacturers from "neutral" to "attractive," raising Samsung Electronics' target price by 12% to 96,000 KRW [3] - SK Hynix has paused its price increase notifications but is reportedly coordinating with clients to adjust prices based on market conditions [2][3]

Financial Data and Key Metrics Changes - The company reported a gross margin above 50%, the highest since mid-fiscal 2022, with DRAM margins also higher than that period [42][44] - The operating margin is the highest since November 2018, indicating improved market conditions and pricing [42][44] - CapEx guidance increased from $13.8 billion in 2025 to approximately $18 billion in 2026, primarily for DRAM construction and equipment [13][14] Business Line Data and Key Metrics Changes - The NAND business is expected to improve due to increased demand from hyperscalers for AI server deployments, despite a current decrease in bits [8][9] - The company is focusing on data center SSDs, having exited the managed NAND segment to concentrate resources on higher ROI areas [11][85] - HBM (High Bandwidth Memory) is expected to gain market share, with aspirations to exceed previous levels due to strong product performance [17][24] Market Data and Key Metrics Changes - The demand for NAND SSDs in data centers is projected to increase significantly in calendar 2026, driven by shortages in HDDs [8][9] - The DRAM market is currently tight, with expectations for further tightening in 2026 due to robust demand and limited supply growth [40][44] - The average capacities for SSDs in AI servers are expected to escalate rapidly, with new high-capacity drives being introduced [55][57] Company Strategy and Development Direction - The company aims to leverage its strong position in the data center SSD market and has announced new product launches to enhance its competitive edge [9][24] - There is a strategic focus on high-value segments such as HBM and high-capacity DIMMs, which are expected to drive significant revenue growth [65][66] - The company is being thoughtful about long-term agreements with customers, considering the evolving landscape and potential tariff impacts [82][83] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving NAND industry conditions and the tightness in the DRAM market, which is expected to enhance pricing and margins [9][40] - The company anticipates that the HBM business will continue to provide high ROI due to its unique product capabilities and customer demand [20][49] - Management highlighted the importance of adapting to the evolving AI market and the need for diverse memory solutions to meet various workloads [72][73] Other Important Information - The company is ramping up its one-gamma DRAM production, which is expected to be a significant contributor to bit growth in fiscal 2026 [47][48] - The company has achieved significant improvements in HBM3E yields and is well-positioned for the HBM4 market [61][62] - The exit from the managed NAND segment is part of a broader strategy to focus on areas with higher profitability potential [85][86] Q&A Session Summary Question: Current state of the NAND industry and pricing outlook - Management indicated that the current quarter's bit decrease is noise and that demand from hyperscalers will drive future growth in NAND [8][9] Question: CapEx guidance clarification - The company confirmed that the increase in CapEx is primarily for DRAM construction and equipment, with minimal additional NAND spending [13][14] Question: HBM market share aspirations - Management expects to gain higher market share in HBM compared to previous years, driven by strong product performance and customer demand [17][24] Question: DRAM and HBM margin comparisons - Management stated that while HBM margins are stable, the overall DRAM portfolio is expected to tighten and improve margins as demand increases [40][49] Question: Long-term agreements with customers - The company is exploring long-term agreements but is cautious about pricing and value creation in light of market changes [82][83] Question: Impact of exiting managed NAND on DRAM sales - Management reassured that exiting managed NAND would not negatively impact DRAM sales, maintaining strong relationships with customers [88][89]

Financial Data and Key Metrics Changes - Micron achieved record revenue of $37.4 billion in fiscal 2025, a nearly 50% increase year-over-year, with gross margins expanding by 17 percentage points to 41% [4][21] - Fiscal Q4 revenue was $11.3 billion, up 22% sequentially and 46% year-over-year, marking a quarterly record [21] - EPS reached $8.29, reflecting a 538% increase compared to the prior year [21] Business Line Data and Key Metrics Changes - DRAM revenue in fiscal Q4 was a record $9 billion, up 69% year-over-year, representing 79% of total revenue [21][22] - NAND revenue for fiscal Q4 was $2.3 billion, down 5% year-over-year but up 5% sequentially [22] - The Cloud Memory Business Unit generated $4.5 billion in revenue, representing 40% of total company revenue, with gross margins of 59% [23] Market Data and Key Metrics Changes - Data center business accounted for a record 56% of total company revenue in fiscal 2025, with gross margins of 52% [11] - The outlook for total server units in calendar 2025 is expected to grow approximately 10%, up from previous mid-single-digit growth expectations [10] - Smartphone unit shipment expectations remain unchanged at low single-digit percentage growth in calendar 2025 [16] Company Strategy and Development Direction - Micron is positioned to benefit significantly from AI-driven demand, with a focus on advanced technologies like HBM and 1-gamma DRAM [5][10] - The company plans to continue investing in its Japan production capability and has begun design work for a second manufacturing fab in Idaho [9][10] - Micron aims to leverage its leadership in advanced technologies to maximize ROI and enhance product mix and profitability [5][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand across various end markets, including data centers, PCs, and automotive, driven by AI trends [11][53] - The company anticipates continued tightness in DRAM supply and improving conditions in the NAND market [18][20] - Management expects fiscal Q1 revenue to be a record $12.5 billion, with gross margins projected at 51.5% [29] Other Important Information - Micron invested $13.8 billion in CapEx in fiscal 2025, with expectations for higher spending in fiscal 2026 [20] - The company received a CHIPS grant disbursement for its new manufacturing fab in Idaho, with the first wafer output expected in the second half of calendar 2027 [9] Q&A Session Summary Question: Guidance on revenue split between DRAM and NAND - Management indicated that the first quarter will have a heavier DRAM mix than NAND, with expectations for a 580 basis points sequential margin expansion driven by pricing and strong execution [33][34] Question: Update on HBM total addressable market (TAM) - Management reiterated that the HBM TAM is expected to reach $100 billion by 2030, with HBM bit CAGR outpacing DRAM CAGR [36][37] Question: Transition from HBM3 to HBM4 - HBM4 production is expected to ramp in line with customer demand, with first shipments anticipated in the second quarter of 2026 [42][43] Question: Sustainability of DRAM demand - Management noted strong demand across AI applications, traditional servers, and smartphones, contributing to a healthy demand-supply environment [52][53] Question: CapEx breakdown for fiscal 2026 - Management stated that the majority of CapEx in 2026 will be for DRAM, with ongoing construction and equipment investments [56][57]

Financial Data and Key Metrics Changes - Micron Technology achieved record revenue of $37.4 billion in fiscal 2025, a nearly 50% increase year-over-year, with gross margins expanding by 17 percentage points to 41% [4][20] - Fiscal Q4 revenue was $11.3 billion, up 22% sequentially and 46% year-over-year, marking a quarterly record [20] - Earnings per share (EPS) reached $8.29, reflecting a 538% increase compared to the prior year [20] Business Line Data and Key Metrics Changes - DRAM revenue in fiscal Q4 was a record $9 billion, up 69% year-over-year, representing 79% of total revenue [20] - NAND revenue for fiscal Q4 was $2.3 billion, down 5% year-over-year but up 5% sequentially [21] - The Cloud Memory Business Unit (CMBU) generated $4.5 billion, accounting for 40% of total revenue, with gross margins of 59% [22] Market Data and Key Metrics Changes - Data center business reached a record 56% of total company revenue in fiscal 2025, with gross margins of 52% [10] - The total server units in calendar 2025 are expected to grow approximately 10%, up from previous mid-single-digit growth expectations [9] - Smartphone unit shipment expectations remain unchanged at low single-digit percentage growth in calendar 2025, with an increasing mix of AI-ready smartphones [16] Company Strategy and Development Direction - Micron is positioned to benefit significantly from AI-driven demand, with a focus on advanced technologies like HBM and 1-gamma DRAM [5][29] - The company plans to continue investing in its manufacturing capabilities, including a new high-volume fab in Idaho and expansion in Japan and Singapore [8][9] - Micron aims to leverage its leadership in advanced technologies to maximize ROI and enhance product mix and profitability [5][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand across various end markets, including data centers, traditional servers, and AI applications [10][49] - The company anticipates continued tightness in DRAM supply and improving conditions in the NAND market [18][19] - Fiscal Q1 guidance reflects expectations for record revenue and EPS, with gross margins projected to strengthen [28] Other Important Information - Micron invested $13.8 billion in capital expenditures in fiscal 2025, with expectations for higher spending in fiscal 2026 [19] - The company achieved a significant increase in productivity through AI applications, with improvements in design and manufacturing processes [6] Q&A Session Summary Question: Guidance on revenue split between DRAM and NAND - Management indicated that the first quarter will have a heavier DRAM mix than NAND, with expectations for a 580 basis points sequential margin expansion driven by pricing and strong execution [32] Question: Update on HBM total addressable market (TAM) - Management reiterated the expectation for HBM TAM to reach $100 billion by 2030, with HBM bit CAGR expected to outgrow DRAM CAGR [36] Question: Transition from HBM3E to HBM4 - HBM4 production is expected to ramp in line with customer demand, with first shipments anticipated in the second quarter of 2026 [40] Question: DRAM demand sustainability - Management noted strong demand across AI applications, traditional servers, and smartphones, contributing to a healthy demand-supply environment [49] Question: CapEx breakdown for fiscal 2026 - Management stated that the majority of fiscal 2026 CapEx will be for DRAM-related construction and equipment, with a net CapEx guidance of around $18 billion [51]

Micron Technology, Inc. (NASDAQ:MU) is one of the Must-Watch AI Stocks on Wall Street. On September 17, Susquehanna analyst Mehdi Hosseini raised the price target $200 from $160 on Wednesday, maintaining a Positive rating. The rating comes ahead of the company’s upcoming earnings report on September 23. The firm expects Micron Technology to beat expectations and raise guidance. Moreover, it anticipates commentary that will emphasize that both average selling price and gross margin will remain strong and c ...