[News] Micron Clouded by Weak Q2 Outlook; High-volume HBM3E 8H Ships to Second Major Customer this Month

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Is the DRAM winter really coming? Despite Micron’s sequential doubling of HBM revenue in the previous quarter, weak demand for PCs and smartphones, combined with a DRAM supply glut, continues to weigh on its business, as its second quarter guidance disappoints the market.

Micron achieved record revenue in fiscal Q1, with revenue, gross margins and earnings per share (EPS) all at or above the midpoint of its guidance range. The company posted quarterly revenue of USD 8.71 billion, an 84% year-over-year increase, with net income of USD 1.87 billion, or USD 1.67 per diluted share.

According to Micron’s press release, it forecasts second-quarter revenue in FY25 of USD 7.9 billion, plus or minus USD 200 million, and adjusted EPS of USD 1.43, plus or minus USD 0.10. The guidance, as per Reuters, is below analyst estimates of USD 8.98 billion and USD 1.91, respectively.

According to TrendForce’s analysis, Micron’s outlook for the February quarter appears bleak, with ASP for traditional DRAM and NAND expected to decline further in 1Q25. TrendForce reports that while HBM’s profitability remains a bright spot, it is insufficient to offset the weaknesses in other product segments. With demand recovery unlikely in the near term, Micron faces continued pressure on its overall financial performance.

Shipment to Pick up by August

Citing CEO Sanjay Mehrotra, the Reuters report notes while demand for smartphones remains weak, shipments are expected to pick up in the second half of Micron’s fiscal year ending August 2025. The company is gaining share in high-margin, strategic markets and is well-positioned to capitalize on AI-driven growth to deliver significant value, according to Mehrotra.

HBM, definitely, would be one of those major growth drivers. In the previous quarter, Micron’s data center revenue soared over 400% year-over year and 40% sequentially, with data center revenue mix surpassing 50% of the memory giant’s revenue for the first time.

Robust Momentum from HBM3E 8H/12H

Notably, Micron reaffirms that its HBM3E 8H is designed into NVIDIA’s Blackwell B200 and GB200 platforms. Additionally, the company commenced high-volume shipments to its second large HBM customer this month, and will start high-volume shipments to its third large customer in the first quarter of 2025, further expanding its HBM customer base.

In September, Micron officially introduced its HBM3E 12H. As per a previous report from Tom’s Hardware, the new products are designed for cutting-edge processors used in AI and high-performance computing (HPC) workloads, including NVIDIA’s H200 and B100/B200 GPUs.

Now, Micron notes that it continues to receive positive feedback from its leading customers for HBM3E 12H.

It is worth noting that Micron has increased its HBM total addressable market (TAM) estimate in 2025 from USD 25 billion to now exceed USD 30 billion. The company’s HBM is already sold out for 2025, with pricing determined.

In 2028, Micron expects HBM TAM to grow four times from the USD 16 billion level in 2024, and to exceed USD 100 billion by 2030.

FY25 Capex to Reach USD 14 Billion

In FY24, Micron invested USD 8.1 billion in capex. Now it expects the overall capex spending in FY25 to be roughly USD 14 billion. According to its press release, it is prioritizing the investments to ramp 1β and 1γ technology nodes, as well as greenfield fab investments for DRAM, which will help support HBM and long term DRAM demand. However, it has cut its NAND capex and is prudently managing the pace of its NAND technology node ramps to manage its supply.

Read more

• [News] Micron’s Upbeat Guidance Rebuts the “DRAM Winter” Rumor, with 12-hi HBM3E to Ramp in early 2025
• [News] Samsung Reportedly Starts Developing Custom HBM4 for Big CSPs, Eyeing Mass Production by 2025

(Photo credit: Micron)