Micron Faces Market Pressures While U.S. Considers Equity Stakes in Chipmakers
This week, Micron Technology Inc. (NASDAQ: MU) saw a lot of ups and downs as the semiconductor manufacturer dealt with competition from
Quick overview
- Micron Technology Inc. faced stock fluctuations this week due to competition from Samsung's successful HBM4 memory chip tests.
- Despite the challenges, Wolfe Research maintains an Outperform rating for Micron, citing strong demand for Nvidia's upcoming Rubin Ultra processors as a long-term growth catalyst.
- The U.S. government is considering acquiring ownership stakes in major chipmakers like Micron as part of CHIPS Act subsidies, complicating the company's situation.
- Micron has reported strong financial performance, raising its revenue and earnings forecasts amid rising DRAM prices driven by AI demand.
This week, Micron Technology Inc. (NASDAQ: MU) saw a lot of ups and downs as the semiconductor manufacturer dealt with competition from Samsung and possible talks for government ownership under the CHIPS Act framework.
Samsung’s HBM4 Progress Threatens Micron’s Market Position
On Wednesday, Micron’s stock fell 3.97% after the Seoul Economic Daily reported that Nvidia’s reliability tests on Samsung Electronics’ new HBM4 memory chips were successful and that the chips are now moving on to the preproduction stage. Nvidia’s next architecture, Rubin, will use these high-bandwidth memory devices. It will replace the existing Blackwell platform.
Micron has been slowly gaining market share in the high-bandwidth memory sector, mostly at Samsung’s expense. This new development is a big problem for them. Samsung’s renewed growth, especially with Nvidia’s support, might undo some of those advantages and make the AI memory market even more competitive.
Wolfe Research still thinks Micron will do well, even though this setback. They gave it an Outperform rating and a price target of $160. Chris Caso, an analyst, pointed out three important things that will affect the stock’s future: strong prices that stay strong, market share changes if Samsung qualifies for HBM4 next year, and HBM margins in 2026 that may go down but still be higher than Micron’s average.
Rubin Ultra Demand Provides Long-Term Catalyst
Wolfe Research found that demand for Nvidia’s Rubin Ultra processors in 2027 was a major reason for Micron’s growth, even though there was not an immediate competitive issue. These new CPUs will need a lot more memory—four times as much per chip and twice as much per GPU as the existing specs.
Caso said, “The HBM content increase for Rubin Ultra in CY27 is the most important short-term driver for DRAM.” “We don’t think the industry has enough capacity to meet that demand yet because Samsung hasn’t qualified yet.” That’s what keeps us structurally positive.
Government Equity Stakes Under Consideration
Reports say that the U.S. government is thinking about purchasing ownership holdings in big chipmakers like Micron, Samsung, and Taiwan Semiconductor Manufacturing Company (TSMC) in exchange for CHIPS Act subsidies. This makes Micron’s situation even more complicated.
Howard Lutnick, the Secretary of Commerce, is said to be looking into ways for Washington to get ownership stakes in companies that get federal money to build semiconductor manufacturing plants. Reuters says that President Donald Trump has said he supports this idea.
The talks are in line with what has happened before. The government previously agreed to Nippon Steel’s purchase of U.S. Steel as long as Washington got a “golden share” with shareholder rights. On Tuesday, Lutnick made it clear that CHIPS funds should only be given in exchange for ownership stakes.
Micron (MU) Strong Financial Performance Amid Uncertainty
Micron has shown strong financial success even if there are uncertainties in the market and with regulations. On August 11, the company upgraded its guidance for the fourth quarter of fiscal year 2025 since DRAM prices were higher and operations were running well.
Micron now expects to make between $11.1 billion and $11.3 billion, which is more than its earlier estimate of between $10.4 billion and $11 billion and more than the $10.73 billion that analysts had expected. The company also raised its adjusted earnings per share outlook from $2.35 to $2.65 to $2.78 to $2.92, which is far higher than the $2.44 expert consensus.
According to J.P. Morgan analyst Harlan Sur, the better outlook was due to DRAM prices being higher than expected in the AI/datacenter, smartphone, and PC industries. This is because AI-driven demand is still rising as large tech companies spend more in advanced chips.
Micron Stock: Market Context and Outlook
Micron’s stock has gone up more than 37% this year, which shows that investors are confident in the company’s place in the AI infrastructure development. However, Samsung’s HBM4 advancement is making the competition tougher, and there are also talks of possible government ownership, which adds new factors that investors need to think about.
The semiconductor sector is still doing well because there is a lot of demand for hardware that can run AI. However, the market is still changing as established companies like Samsung fight to get back the ground they lost and governments want to gain more control over important technical infrastructure.
As Micron nears the end of its fiscal year, it will be important for the business to keep its pricing power and market position in high-bandwidth memory. This will help it keep up its recent momentum in a market that is becoming more complicated and competitive.
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