An expected 2023-2024 AI PC and Smartphone market surge appears to be dead on arrival and is having an immediate impact on Micron. According to multiple reports (via Tom’s Hardware), a weak market is to blame for the company, which is best known for its PC memory technology in SSDs, GPUs, and system memory. It was expected that a “Supercycle” in PC and Smartphones would generate upwards of $8.721 billion for its Q3 revenue but that ended up being slightly lower at $8.709 billion. This has triggered Micron to forecast around $7.9 billion for its Q2 25 revenue, more or less a billion shy of Wallstreet’s previously expected $8.98 billion total, and has now seen the chip manufacturer’s stock drop by more than 16%.
Despite the doom and gloom for Micron, there could still be hope on the horizon for the well-known system memory manufacturer. Micron has invested heavily in HBM production and the needs of its enterprise clients are expected to grow YoY through 2030. Demand from NVIDIA, AMD, Broadcom, Marvell, and others, is believed to drive its business from $16 Billion TAM this year to over $100 billion by the end of the decade.
Per Daniel Newman (via X formerly Twitter):
- “The good news is HBM is selling well and growing fast meaning the AI chip demand is still in tact.”
- “Bad news is the AI PC and AI smartphone “supercycle” has more or less been a bust.”
- “But, Micron core business is recovering very slowly. And this will drag on future quarters and HBM can’t entirely make up for it.”
Newman goes on to explain that Micron’s primary source of revenue historically comes from the PC and Smartphone sector and while its HBM division is expected to see double-digit growth, it will take time before that can counter current market conditions. The sluggish adoption of AI PC and Smartphones is blamed on a lack of customer demand where consumers are buying laptops not because of AI capability but simply because they are what’s available as Microsoft moves closer to ending support for Windows 10. Micron is also facing another challenge with slow-moving inventory among its customers.