Micron's DRAM supplies were temporarily affected by the Taiwan earthquake, but the long-term outlook remains strong

Micron's DRAM supplies were temporarily affected by the Taiwan earthquake, but the long-term outlook remains strong

Micron Technology Inc (NASDAQ:MU) announced that the April 3 earthquake in Taiwan will likely reduce DRAM supplies for the calendar quarter by up to the mid-single digits.

With operations in four Taiwanese locations, Micron plays an important role in the global chip supply chain, raising concerns about potential disruptions due to the earthquake.

However, the company clarified that although it has not reached full DRAM production capacity after the earthquake, the event will not impact its DRAM supply capabilities in the long term, Reuters reports.

These chips, designed for use in Nvidia Corp's (NASDAQ:NVDA) H200 GPUs for AI applications, have seen huge market demand.

The AI ​​industry's booming demand for DRAM chips has sent Micron shares higher as investors recognize the company's growing role in supplying the technology sector.

In response to growing demand, especially from the AI ​​sector, Micron began mass production of high-bandwidth memory (HBM) chips in February.

A 7.2-magnitude earthquake struck Taiwan today, Wednesday, at 8 a.m. local time, with its epicenter in Hualien in eastern Taiwan. This was the strongest earthquake to hit the region in 25 years.

Taiwan Semiconductor Manufacturing (NYSE:TSM) quickly evacuated its factories, raising concerns about potential impacts on production.

However, TSMC maintained that its safety protocols were effective, reporting a rapid recovery of more than 80% in tool functions at its facilities, including the advanced Fab 18 in Tainan, anticipating full operating mode by the end of the day. Meanwhile, Nvidia announced that, after consulting with its manufacturing partners, it does not anticipate any disruption to its supply chain due to the earthquake, Reuters reported.

Analysts cited Micron's HBM3E for its outstanding thermal and power efficiency, highlighting its 30% lower power consumption compared to SK Hynix and its technological superiority over Samsung, which faced delays.

The story continues

They forecast that Micron will dominate the HBM market, and HBM's revenues will likely exceed $1 billion by calendar year 2024, positioning Micron as an important player in the semiconductor sector.

Micron stock is up more than 96% in the past 12 months. Investors can gain exposure to the stock through the REX FANG & Innovation Equity Premium Income ETF (NASDAQ:FEPI) and Invesco Semiconductors ETF (NYSE:PSI).

Price Action: MU shares were trading 3.16% higher at $126.06 at last check on Thursday.

Disclaimer: This content was produced in part with the help of artificial intelligence tools and was reviewed and published by Benzinga editors.

Image courtesy of Micron

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