Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Equity Bottom-Up

Micron Technology, Inc., through its subsidiaries, manufactures and markets dynamic random access memory chips (DRAMs), very fast static random access memory chips (SRAMs), Flash Memory, other semiconductor components, and memory modules.

<ul>
<li>Micron is doing very well lately, mainly from its position in HBM, and this is likely to be a key positive factor in their upcoming June 25 earnings call</li>
<li>Hyperscaler CapEx has slowed, but the CapEx share of revenues continues to rise, indicating speculation that AI growth will come</li>
<li>Despite the above, Nvidia revenues have continued to grow, which is a positive indication for HBM sales</li>
</ul>


Micron is doing very well lately, mainly from its position in HBM, and this is likely to be a key positive factor in their upcoming June 25 earnings call
Hyperscaler CapEx has slowed, but the CapEx share of revenues continues to rise, indicating speculation that AI growth will come
Despite the above, Nvidia revenues have continued to grow, which is a positive indication for HBM sales


Micron Upcoming Earnings Vs.Hyperscaler CapEx Slowdown

SK Hynix Inc. provides products and services for the electronic components industry. The Company manufactures semiconductors, such as dynamic random access memory (DRAM), NAND flash memory, and static random access memory (SRAM) chips.

<ul>
<li>SK hynix announced their second-highest revenue and operating profit for the first quarter of 2025</li>
<li>Much of the company's performance is the result of its first-mover advantage and excellent execution in the HBM market</li>
<li>Two issues threaten the company: AI growth may stall, and tariff changes could interfere with the company's global supply chain</li>
</ul>


SK hynix announced their second-highest revenue and operating profit for the first quarter of 2025
Much of the company's performance is the result of its first-mover advantage and excellent execution in the HBM market
Two issues threaten the company: AI growth may stall, and tariff changes could interfere with the company's global supply chain


SK Hynix Earnings Highlights Strong AI Dependence and Tariff Concerns

<ul>
<li>Micron's strong HBM and Data Center growth has nearly offset low revenues in the remainder of the company's business.</li>
<li>This HBM growth depends heavily upon continued strength in hyperscale data center AI CapEx</li>
<li>Micron outlined means to maintain stability in its industry, but China semiconductor goals are in conflict with these measures</li>
</ul>


Micron's strong HBM and Data Center growth has nearly offset low revenues in the remainder of the company's business.
This HBM growth depends heavily upon continued strength in hyperscale data center AI CapEx
Micron outlined means to maintain stability in its industry, but China semiconductor goals are in conflict with these measures


Micron 2QF25 Earnings Call Positive, But Tread with Caution

Thematic (Sector/Industry)

<ul>
<li>Hyperscaler CapEx could be slowing down, based on 4Q24 spending</li>
<li>Microsoft made a significant cut in Q4, but Amazon, Facebook, and Alibaba all made big increases</li>
<li>Industry CapEx as a percent of revenue has slowed its growth</li>
</ul>


Hyperscaler CapEx could be slowing down, based on 4Q24 spending
Microsoft made a significant cut in Q4, but Amazon, Facebook, and Alibaba all made big increases
Industry CapEx as a percent of revenue has slowed its growth


<ul>
<li>Despite the chip market's 19% overall 2024 Y/Y increase, the only real growth was in semiconductors for AI applications.  A turn in the AI business could cause a collapse.</li>
<li>Outside of AI, growth was significantly more modest at 4.8%, which is good compared to the industry's historical growth rate of 3.9%, but is nowhere near the 19% overall number.</li>
<li>The US' trade sanctions appear to be having some impact on chip shipments to China vs. the Americas, but this may be an illusion.</li>
</ul>


Despite the chip market's 19% overall 2024 Y/Y increase, the only real growth was in semiconductors for AI applications.  A turn in the AI business could cause a collapse.
Outside of AI, growth was significantly more modest at 4.8%, which is good compared to the industry's historical growth rate of 3.9%, but is nowhere near the 19% overall number.
The US' trade sanctions appear to be having some impact on chip shipments to China vs. the Americas, but this may be an illusion.


What Do Detailed 2024 Semi Stats Tell Us?