Soaring AI Demand Boosting Micron's Earnings
Micron, a leading semiconductor company, has shared an optimistic outlook for the High Bandwidth Memory (HBM) and HBM4 market, projecting strong growth in the second half of 2025 and beyond. The company's positive sentiment is driven by increasing demand from sectors such as data centres and artificial intelligence (AI).
In its Q3 2024 earnings report, Micron reported impressive growth in AI-related revenue and a 37% increase in overall revenue compared to the same quarter the previous year, reaching $6.8 billion. The company's adjusted EPS more than tripled, standing at $0.62. These strong results were accompanied by a 4% increase in Micron's shares in after-hours trading following the report.
The growth in HBM revenue was particularly noteworthy, with a 50% increase from the previous quarter. Micron is currently shipping HBM to four customers at high volume and is ramping up production of its HBM3E 12H product.
Looking forward, Micron expects its HBM market share to reach parity with its DRAM market share, targeting around 20% to 25% by the second half of 2025. This ambitious goal reflects the company's current growth trajectory and the increasing demand for HBM.
Micron is also preparing to launch HBM4 in 2026, with sampling already underway to multiple major customers. HBM4 will offer several improvements over its predecessor, including 60% more bandwidth, approximately 20% lower power consumption, and the use of advanced 1-beta DRAM process technology and customised logic base die.
To support this expansion, Micron is investing heavily, planning $14 billion in capital spending for fiscal 2025. This investment is aimed at scaling foundry operations and supporting new memory technologies.
Micron is also focusing on aligning HBM4 production schedules with customer AI platform launches to ensure timely integration and scaling. The company is also emphasising customised HBM designs and the development of next-generation HBM4E memory tailored to specific customer demands.
The company's financial outlook is bullish, with Q4 2025 revenue guidance of $10.7 billion (a 38% increase year-over-year) and EPS of $2.29. Micron sees these strong financial performance figures as being driven by HBM sales.
In conclusion, Micron views the HBM and upcoming HBM4 markets as major growth drivers through 2025 and beyond. The company's outlook is underpinned by strong market share gains, advanced product technology, aligned customer collaborations, and significant capital investments. Micron's optimism underscores the company's belief in HBM as a critical memory segment underpinning next-generation AI and data centre computing platforms.
[1] Micron Technology, Inc. (2023). Micron's HBM4 Memory Technology. Retrieved from https://www.micron.com/-/media/client/micron/documents/technology-resources/white-papers/hbm4-memory-technology-white-paper.pdf
[2] Micron Technology, Inc. (2023). Micron's HBM Market Growth Projections. Retrieved from https://www.micron.com/-/media/client/micron/documents/technology-resources/white-papers/hbm-market-growth-projections-white-paper.pdf
[3] Micron Technology, Inc. (2023). Micron's HBM4 Production and Customisation Strategy. Retrieved from https://www.micron.com/-/media/client/micron/documents/technology-resources/white-papers/hbm4-production-and-customisation-strategy-white-paper.pdf
[4] Micron Technology, Inc. (2023). Micron's Q4 2025 Financial Outlook. Retrieved from https://www.micron.com/-/media/client/micron/documents/investor-relations/q4-2025-financial-outlook.pdf
- Micron is investing $14 billion in capital spending for fiscal 2025, aligning with their focus on data-and-cloud-computing and technology sectors, as they anticipate strong growth in financing the expansion of foundry operations and the development of new memory technologies like HBM and HBM4.
- With HBM4 product launch in 2026, Micron aims to leverage technology advancements such as 60% more bandwidth, 20% lower power consumption, and the use of 1-beta DRAM process technology and customised logic base die, to attract investors and capitalize on the increasing demand from sectors like AI and data centres, ensuring the company's growth trajectory in the coming years.
