Micron Technology Inc., the American memory giant, has slightly increased its capital expenditure for this year (2024) and has not updated its financial forecasts for the second quarter (March to May).

According to reports from Reuters, Investing.com, and other global news outlets, Matt Murphy, the CFO of Micron, stated on May 21st that the company’s capital expenditure forecast for 2024 is expected to reach approximately USD 8 billion, up from the previous estimate of USD 7.5 billion. This increase is primarily attributed to investments in High Bandwidth Memory (HBM).

Micron’s Chief Operating Officer, Manish Bhatia, stated that the scale of the HBM business is expected to expand to several billion dollars in the 2025 fiscal year.

As per a previous report by Economic Daily News, Micron’s current 8-layer stacking model offers the advantage of higher heat dissipation efficiency, as fewer layers allow for better cooling, ensuring stable chip performance. Additionally, Micron is planning to launch a 12-layer stacked 36Gb DRAM chip. Per a report from Tom’s Hardware, this new chip’s capacity is expected to be 50% greater than that of the previous 8-layer stack.

In March, Micron CEO Sanjay Mehrotra indicated that the company’s HBM earmarked for AI applications are sold out for 2024, with much of the 2025 supply already allocated.

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(Photo credit: Micron)

Memory giants Samsung, SK Hynix, and Micron are all actively investing in high-bandwidth memory (HBM) production. Industry sources cited in a report from Commercial Times indicate that due to capacity crowding effects, DRAM products may face shortages in the second half of the year.

According to TrendForce, the three largest DRAM suppliers are increasing wafer input for advanced processes. Following a rise in memory contract prices, companies have boosted their capital investments, with capacity expansion focusing on the second half of this year. It is expected that wafer input for 1alpha nm and above processes will account for approximately 40% of total DRAM wafer input by the end of the year.

HBM production will be prioritized due to its profitability and increasing demand. Regarding the latest developments in HBM, TrendForce indicates that HBM3e will become the market mainstream this year, with shipments concentrated in the second half of the year.

Currently, SK Hynix remains the primary supplier, along with Micron, both utilizing 1beta nm processes and already shipping to NVIDIA. Samsung, using a 1alpha nm process, is expected to complete qualification in the second quarter and begin deliveries mid-year.

The growing content per unit in PCs, servers, and smartphones is driving up the consumption of advanced process capacity each quarter. Servers, in particular, are seeing the highest capacity increase—primarily driven by AI servers with content of 1.75 TB per unit. With the mass production of new platforms like Intel’s Sapphire Rapids and AMD’s Genoa, which require DDR5 memory, DDR5 penetration is expected to exceed 50% by the end of the year.

As HBM3e shipments are expected to be concentrated in the second half of the year—coinciding with the peak season for memory demand—market demand for DDR5 and LPDDR5(X) is also expected to increase. With a higher proportion of wafer input allocated to HBM production, the output of advanced processes will be limited. Consequently, capacity allocation in the second half of the year will be crucial in determining whether supply can meet demand.

Samsung expects existing facilities to be fully utilized by the end of 2024. The new P4L plant is slated for completion in 2025, and the Line 15 facility will undergo a process transition from 1Y nm to 1beta nm and above.

The capacity of SK Hynix’s M16 plant is expected to expand next year, while the M15X plant is also planned for completion in 2025, with mass production starting at the end of next year.

Micron’s facility in Taiwan will return to full capacity next year, with future expansions focused on the US. The Boise facility is expected to be completed in 2025, with equipment installations following and mass production planned for 2026.

With the expected volume production of NVIDIA’s GB200 in 2025, featuring HBM3e with 192/384GB specifications, HBM output is anticipated to nearly double. Each major manufacturer will invest in HBM4 development, prioritizing HBM in their capacity planning. Consequently, due to capacity crowding effects, there may be shortages in DRAM supply.

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(Photo credit: Samsung)

Micron, the largest memory manufacturer in the United States, is expected to receive over USD 6 billion in funding from the Department of Commerce to assist with the costs of local factory projects, as part of efforts to bring semiconductor production back to U.S. soil.

According to a report from Bloomberg, sources revealed that the funding has not been finalized yet and could be announced as soon as next week. It is still unclear whether Micron plans to seek further loans through the “Chip Act” in addition to direct funding.

Micron Technology, the U.S. Department of Commerce, and representatives from the White House all declined to comment on the reported funding.

The U.S. “Chip Act” provides semiconductor companies with USD 39 billion in direct funding and USD 75 billion in loans and loan guarantees to revitalize the U.S. semiconductor manufacturing industry, which has shifted production to Asia over the past few decades. U.S. Commerce Secretary Gina Raimondo stated that approximately USD 28 billion of this funding will be allocated towards advanced manufacturing processes.

So far, the Department of Commerce has announced six grants, with three provided to established semiconductor companies. Specifically, TSMC received USD 6.6 billion USD, Samsung received USD 6.4 billion, and Intel received USD 8.5 billion.

As per the same report from Bloomberg, Micron has committed to building up to four factories in New York and one in Idaho. However, Micron CEO Sanjay Mehrotra emphasized in March that these plans require Micron to obtain sufficient chip subsidies, investment tax credits, and incentives to address the cost differentials compared to expanding overseas.

Raimondo previously stated that the Department of Commerce will prioritize funding projects that commence before 2030. Per to previous documents from Micron cited by Bloomberg, among the four planned factories in New York, only two new factories may meet this requirement, with the other two not expected to start operations until 2041. Insiders suggest that this could mean that Micron’s subsidies may only support the first two factories in New York.

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On April 15th, during the Member Representatives Symposium of the World Internet Conference, Jiang Tao, Vice President of Intel, and Mark Murphy, Executive Vice President and CFO of Micron, expressed their respective views on the theme “Interconnection, Mutual Benefit, and Common Prosperity — Building a Community of Shared Future in Cyberspace”, and discussed future development of international organizations and industry hot topics with other member representatives.

• Micron to Continuously Cultivate the Chinese Market and Jointly Shape the Future of the Global Semiconductor Industry

Having been rooted in China for over 20 years, Micron has established close cooperation with its customers.

On March 27, 2024, Micron announced that its new packaging and testing plant in Xi’an had officially broken ground, further strengthening the company’s unwavering commitment to operations, customers, and communities in China. Micron also announced at the groundbreaking ceremony that it will establish its first sustainable Center of Excellence (CoE) for packaging and testing in Xi’an.

In June 2023, Micron announced an additional investment of CNY 4.3 billion in Xi’an, inclusive of the construction of this new plant, introduction of new production lines, and the production of a wider range of product solutions, including but not limited to mobile DRAM, NAND, and SSD, with an aim to expand the existing DRAM packaging and testing capabilities in Xi’an.

Mark Murphy expressed that Micron is deeply rooted in China and has been committed to achieving multi-level development in China for a long time. Micron’s investments in China is a testament of its confidence in the Chinese market, strong semiconductor ecosystem, and high-quality talent. Down the road, it will continue to provide support for its customers and for the innovation in the broader semiconductor ecosystem in China.

• Intel: China Has many Conditions to Attract Global Enterprises

Currently, AI technology enjoys burgeoning growth, empowering various industries.

Intel’s VP Jiang Tao pointed out that China boast a vast market, resilient supply chain, numerous innovative application scenarios, and rich multi-level, high-quality talent resources, which are attractive to all global companies.

He expects that international organizations at the World Internet Conference can play a leading role in promoting AI technology and applications, consolidating industry consensus, and promoting full exchange among government, industry, academia, and relevant professionals in the latest developments and future trends of AI industry.

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(Photo credit: Intel)

AI and big data are driving a massive demand for memory data, which also imposes higher requirements on memory technologies. Against this backdrop, the technology competition among memory giants is heating up.

In terms of NAND Flash, major companies are focusing on breakthroughs in the number of layers. Recently, The Korean Economic Daily reported that Samsung Electronics is expected to mass-produce the ninth-generation NAND Flash (V-NAND) later this month.

The company had already produced the 236-layer eighth-generation V-NAND Flash memory at scale in 2022. The upcoming ninth-generation V-NAND Flash memory will continue to use the structure of double NAND Flash stacks, with the number of layers reaching 290. According to industry predictions, Samsung’s future tenth-generation V-NAND is expected to reach 430 layers, and Samsung will switch to a three-stack structure at that time.

Looking further into the future, both Samsung and Kioxia have revealed plans to develop 1000-layer NAND Flash. Samsung aims to develop 1000-layer NAND Flash by 2030, while Kioxia plans to mass-produce 3D NAND Flash chips with more than 1000 layers by 2031.

In terms of DRAM, memory giants are zeroing in on advanced process nodes and 3D DRAM.

In March 2024, Micron disclosed in its financial result that the majority of DRAM chips are currently at the 1α and 1β advanced nodes, and the next generation 1γ DRAM will introduce EUV lithography machine, which has already undergone trial production.

Samsung’s DRAM chip technique is at the 1b nm level, and recent reports suggest that Samsung plans to start large-scale production of 1c nm DRAM within this year, using EUV technology. Samsung will also step into the era of 3D DRAM in 2025. The company has already demonstrated two 3D DRAM technologies: vertical channel transistors and stacked DRAM.

SK Hynix is also developing 3D DRAM. Last year, BusinessKorea reported that SK Hynix proposed using IGZO as the new generation channel material for 3D DRAM. According to industry sources, IGZO is a metal oxide material composed of indium, gallium, and zinc oxide. Its biggest advantage is its low standby power consumption, making it suitable for DRAM transistors requiring long lifespan. This characteristic is easily achievable by adjusting the composition ratio of In, Ga, and ZnO.

(Photo credit: Samsung)