Micron Technology Inc (NASDAQ:MU) said the April 3 earthquake in Taiwan is expected to reduce its dynamic random access memory (DRAM) supply for the calendar quarter by up to a mid-single-digit percentage.
With offices in four Taiwanese locations, Micron plays a significant role in the global chip supply chain, raising concerns about possible disruptions due to the earthquake.
However, the company clarified that while it has not yet reached full DRAM production capacity following the earthquake, the event has no impact on its long-term DRAM supply capacity, Reuters reports.
These chips are designed for use in Nvidia Corp (NASDAQ:NVDA) H200 graphics processing units for AI applications are enjoying tremendous market demand.
The AI industry’s booming demand for DRAM chips has caused Micron shares to rise as investors recognize the company’s growing role in supplying the technology sector.
In response to increasing demand, particularly from the AI space, Micron began mass production of its high-bandwidth memory (HBM) chips in February.
A magnitude 7.2 earthquake struck Taiwan at 8 a.m. local time on Wednesday, with Hualien in eastern Taiwan as its epicenter. This was the worst earthquake to hit the region in 25 years.
Taiwan Semiconductor Manufacturing Co (NYSE:TSM) quickly evacuated its factories, raising concerns about the potential impact on production.
However, TSMC assured that its safety protocols are effective and reported a rapid recovery of tool functionality of over 80% at its facilities, including the modern Fab 18 in Tainan, and expects to reach full operational status by the end of the day. Meanwhile, Nvidia said it does not expect any disruptions to its supply chain due to the earthquake after consulting with its manufacturing partners, Reuters reported.
Analysts praised Micron’s HBM3E for its excellent thermal and power efficiency, highlighting its 30% lower power consumption over SK Hynix and its technological edge over Samsung, which has faced delays.
They predicted that Micron would dominate the HBM market, potentially generating over $1 billion in HBM sales by calendar year 2024, making Micron a significant player in the semiconductor sector.
Micron stock is up over 96% in the last 12 months. Investors can invest in the stock through the following REX FANG & Innovation Equity Premium Income ETF (NASDAQ:FEPI) and Invesco Semiconductors ETF (NYSE:PSI).
Price promotion: MU shares were trading higher by 3.16% at $126.06 at last check on Thursday.
Disclaimer: This content was created in part using AI tools, and was reviewed and published by Benzinga editors.
Photo courtesy of Micron
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This article: Micron’s DRAM supply temporarily hit by Taiwan earthquake, but long-term outlook remains bright originally appeared on Benzinga.com
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