Micron Faces HBM4 Challenges as Samsung Gains Ground with Nvidia

Micron Technology's stock experienced a dip after hitting an all-time high, as competitor Samsung Electronics secured a crucial qualification from Nvidia for its 12-layer HBM3E memory chips. This development positions Samsung favorably in the race for next-generation HBM4 technology, where Nvidia is seeking significantly higher data transfer speeds.

Samsung's HBM3E Qualification and HBM4 Prospects

Samsung Electronics has successfully passed Nvidia's qualification tests for its 12-layer HBM3E memory chips, a significant milestone after previous attempts. While Samsung will initially supply Nvidia in limited volumes, behind SK Hynix and Micron, this qualification is seen as a major step forward for the Korean tech giant. The company is reportedly making strides in meeting Nvidia's demanding HBM4 specifications, which require data transfer speeds exceeding 10 gigabits per second, compared to the current industry standard of 8 Gbps. Samsung has demonstrated 11 Gbps speeds, reportedly outpacing SK Hynix's 10 Gbps, while Micron is said to be encountering difficulties in meeting these advanced requirements. Samsung plans to submit HBM4 samples to Nvidia this month for early qualification and has already secured qualification and shipped HBM3E 12-High chips to AMD.

Analyst Reactions and Market Outlook

Industry analysts have offered mixed perspectives on these developments. Wells Fargo analyst Andrew Rocha suggested that Samsung's qualification could lead to "incremental negative pressure on HBM pricing," particularly if Samsung employs aggressive pricing strategies to capture market share. Despite this, many Wall Street analysts remain optimistic about Micron's performance. TD Cowen analyst Krish Sankar raised his price target for Micron to $180 from $150, maintaining a Buy rating and citing continued momentum for the stock. Similarly, Barclays analyst Tom O’Malley increased his price target to $175 from $140, reiterating an Overweight rating. JPMorgan analyst Sandeep Deshpande viewed Samsung's progress as a positive for semiconductor equipment manufacturers, such as ASML, as it reintroduces a major memory player into the advanced HBM competition. Deshpande also highlighted Samsung's advantage in having available cleanroom space to rapidly scale production.

Key Takeaways

• Samsung has qualified its 12-layer HBM3E memory chips with Nvidia.

• Samsung appears to be leading in the race for next-generation HBM4 specifications.

• Micron is reportedly facing challenges in meeting the higher data transfer speed requirements for HBM4.

• Analyst sentiment remains largely positive for Micron's stock despite these competitive developments.

Key Takeaways

• Samsung secures Nvidia HBM3E qualification as Micron faces HBM4 hurdles By Investing.com, Investing.com.

• Micron’s Rally Defies Seasonal Trends—But Can Technicals Keep Up?, Investing.com.