Micron Technology has begun mass-producing its high-bandwidth memory (HBM) semiconductors for use in Nvidia’s latest artificial intelligence chip, causing Micron’s shares to rise by over 5% on Monday.
The new HBM3E (High Bandwidth Memory 3E) chips, according to Micron, consume 30% less power than competing offerings. This makes them desirable for the increasing demand for chips used in generative AI applications.
Nvidia intends to incorporate these chips into its next-generation H200 graphic processing units, slated to start shipping in the second quarter. These units are expected to surpass the current H100 chip, which contributed significantly to Nvidia’s revenue surge.
Anshel Sag, an analyst at Moor Insights & Strategy, views Micron’s move as a substantial opportunity, especially considering the rising popularity of HBM chips for AI applications.
The demand for HBM chips, largely driven by Nvidia supplier SK Hynix, gives investors hope that Micron can withstand slow recoveries in other markets. HBM manufacturing is among Micron’s most profitable endeavors, partly due to its technical complexity.
The company anticipates “several hundred million” dollars in HBM revenue for fiscal 2024, with continued growth projected for 2025.
Let’s take a look at the chart and see if we have any interest in trading MU stock.
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