Micron Technology has recently announced that it will increase its 2024 capital expenditure forecast to approximately $8 billion, with a focus on investments in high bandwidth memory (HBM) semiconductors for AI applications. Based in Boise, Idaho, Micron is a key supplier of HBM chips crucial for AI servers. The company’s cutting-edge HBM3E chips will power Nvidia’s H200 chips. By March, Micron had already sold out its entire 2024 inventory of HBM chips, with a significant portion of the 2025 supply already pre-allocated. As a result, Micron is increasing production from eight-layer HBM chips to 12-layer variants.
CFO Matt Murphy made the announcement about the updated capital expenditure forecast, emphasizing the potential for HBM to become a multibillion-dollar segment by fiscal 2025. Despite this positive announcement, Micron’s shares fell by about 3% amidst market volatility, although they were still up 51% for the year as of the previous Monday.
The dip in Micron’s stock price despite the positive forecasts reflects broader market volatility. However, the significant rise in shares this year indicates strong investor confidence. Keeping an eye on semiconductor stocks like Micron could provide insights into potential growth areas, particularly as demand for AI technology continues to increase.
In the bigger picture, AI is driving significant demand for advanced HBM semiconductors, a trend that Micron is seeking to capitalize on with its expanded production. As global tech demands rise, investments in AI and related technologies are expected to increase. Geopolitical and economic factors will likely influence this sector as countries invest more in AI technology. Overall, Micron’s commitment to investing in HBM technology highlights the growing importance of these advanced semiconductors in driving innovation and growth within the tech industry.
