Micron Technology (NASDAQ: MU) was caught up in yesterday’s semiconductor swoon after ASML Holdings (NASDAQ: ASML) gave soft guidance for 2025. However, today it appears Micron is bouncing back from those fears, which were likely overblown in Micron’s case. Shares of the memory chip leader surged 5% today as of 2:38 p.m. ET.
In addition, the company unveiled new DDR-5 products for artificial intelligence (AI) PCs that may have sparked renewed enthusiasm.
Yesterday, ASML guided for a softer-than-expected 2025, noting that while AI revenues remain strong, demand for non-AI chips is recovering slower than expected.
While lower-than-expected demand may be a headwind for Micron, remember that memory pricing moves around much more than logic chips. So if memory players are moderating their capital spending, that could limit supply and therefore buoy memory pricing.
Furthermore, Micron and other memory players have the option of repurposing existing equipment for high-bandwidth memory (HBM) for AI. So even if other end markets are soft, it appears Micron can redirect equipment toward these highly in-demand AI chips.
Additionally, today Micron unveiled two new types of DDR-5 memory modules specifically designed for AI personal computers, with clock drivers directly on the memory module, rather than the CPU, as is traditionally the case. Called clocked unbuffered dual inline memory modules (CUDIMM) and clocked small outline dual memory modules (CSODIMM), these new technologies offer speeds that are twice as fast as DDR-4 and 15% faster than traditional DDR-5, and are the first such modified DDR-5 products for AI PCs on the market.
Today’s release shows that Micron continues to press its technology chops versus peers. Whereas five years ago it was a technology laggard, the company has now caught up with and even surpassed rivals Samsung and SK Hynix in most leading-edge memory technologies.
Memory is thought of as a commodity-like industry, but as long as Micron keeps pushing ahead with new technology faster than peers, it should become a more dependably profitable business going forward.
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Billy Duberstein and/or his clients has positions in ASML and Micron Technology. The Motley Fool has positions in and recommends ASML. The Motley Fool has a disclosure policy.
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