Daily: Micron beats analyst expectations amid memory crunch
7.5 min read.
Highlights
Micron beats analyst expectations. Micron gave an upbeat quarterly earnings forecast as the AI boom fuels a memory crunch / supercycle. Revenue is projected for ~US$19 billion, beating the ~US$14 billion that investors had estimated. Shares jumped some 8% in after-hours trading, with the stock up over 150% year to date.
Elsewhere in memory, Chinese tech companies Xiaomi and Honor, join many other electronics and auto makers around the world who are raising prices of their products as the memory components become more expensive.
Chinese chip firms look to IPO. I wrote yesterday about Chinese chipmakers that are seeking to raise money through IPO to great success and much fanfare. Bloomberg reports that there are more Chinese chip and AI companies looking to IPO in coming weeks, including chip companies Biren, Montage Technology, GigaDevice Semiconductor, and OmniVision.
Lisa Su in Beijing. AMD CEO Lisa Su is in China seeking to shore up their business ties with Beijing. Relaxed US export controls for Nvidia often has flow on effects to AMD, which makes comparable chips.
Thanks for reading.
1. Policy and Geopolitics
1.1
Bloomberg (12/17): Chinese Chip Firms Line Up for Hong Kong Listings in Coming Weeks
At least six Chinese companies related to artificial intelligence are set to go public in Hong Kong in the coming weeks, people familiar with the matter said, building on the strong recent listings on the mainland.
Among them are Shanghai-traded chip firms Montage Technology Co. and GigaDevice Semiconductor Inc., each aiming to raise as much as $1 billion in listings as early as January, said the people who requested anonymity discussing private matters.
AI chipmaker Shanghai Biren Technology Co. is also slated to start gauging investor interest in the coming days for an initial public offering worth around $600 million, the people said.
Shanghai-listed chip designer OmniVision Integrated Circuits Group Inc. is also gauging investor interest this week for a Hong Kong offering worth as much as $1 billion, Bloomberg News reported.
1.2
SCMP (12/17): AMD chief Lisa Su commits to ‘deeper’ China investments in meeting with industry minister
Lisa Su, chair and chief executive of Advanced Micro Devices (AMD), on Wednesday met the Chinese minister of industry and information technology (MIIT), where she affirmed the US chipmaker’s “commitment to deepening its investments” in China, the ministry said.
On her second day of a China trip, Su exchanged views with MIIT head Li Lecheng on “strengthening cooperation in the digital economy and artificial intelligence sectors”, according to a statement issued by MIIT on Wednesday.
1.3
Politico (12/11): Trump enlists 5 allies to counter China on rare earths and tech
The Trump administration is forming a coalition to counter China’s dominant control of critical minerals and emerging power as a center of AI and other tech sectors.
The administration plans to launch the coalition of partners with the signing Friday of the Pax Silica Declaration, uniting Australia, Israel, Japan, Singapore and South Korea in a collaboration intended to address deficits in critical mineral access edging out China’s massive investment in its critical minerals and tech sector. The administration is actively looking to enlist other countries to join the group.
1.4
Bloomberg (12/18): Chip Shortage Lingers as Honda to Halt Output in Japan, China
Honda Motor Co. will halt production at plants in Japan and China in coming weeks, highlighting the lingering fallout of the global chip shortage.
The Japanese carmaker will suspend output in Japan on Jan. 5 and Jan. 6, a spokesperson said Thursday, without specifying which plants will be affected. All three of the facilities in its joint venture in China, Guangqi Honda Automobile Co., will be offline from Dec. 29 to Jan. 2.
Carmakers around the world have had their production plans thrown into disarray in recent months after China blocked Nexperia BV — owned by Chinese company Wingtech Technology Co. — from exporting products made at its local plants.
1.5
Reuters (12/18): Republican lawmakers decry Intel’s testing of Chinese-linked tools after Reuters report
Republican lawmakers accused Intel this week of threatening U.S. national security after Reuters revealed the chipmaker was evaluating chipmaking equipment made by a company with deep ties to China and overseas units sanctioned by the U.S. government.
Intel, whose CEO came under pressure from President Donald Trump to resign in August over his alleged ties to China, got the tools from ACM Research, a Fremont, California-based producer of chipmaking equipment.
The tools were tested for possible use in Intel’s most advanced chipmaking process, known as 14A.
2. Economy, Finance, and Business
2.1
Bloomberg (12/18): Micron Gives Rosy Sales Forecast After AI Boom Spurs Demand
Micron Technology Inc., the largest US maker of computer memory chips, gave an upbeat forecast for the current quarter, a sign that surging demand and supply shortages are allowing the company to charge more for products.
Fiscal second-quarter revenue will be $18.3 billion to $19.1 billion, the company said in a statement Wednesday. Analysts had estimated $14.4 billion on average for the period. Excluding some items, profit will be $8.22 to $8.62 a share, compared with a projection of $4.71.
Micron shares rose about 8% in late trading after the results were released. The stock was already up 168% this year, closing at $225.52 on Wednesday.
2.2
SCMP (12/17): Memory crunch: Chinese tablet makers Xiaomi and Honor raise prices as chip costs surge
Chinese tablet makers, including Xiaomi and Honor, have raised prices across their product lines as they scrambled to absorb soaring costs of memory chips.
Xiaomi, the Beijing-based smartphone and electric vehicle maker, has imposed mark-ups of 100 yuan (US$14) to 300 yuan on several tablet products this week, including its entry-level Redmi Pad 2 and the premium Xiaomi Pad 8 series.
The Redmi Pad 2, launched in June this year with a starting price of 999 yuan, now carries a price tag of 1,199 yuan for the base model. The Xiaomi Pad 8 Pro now sells for 4,099 yuan, 200 yuan more than its September launch price.
2.3
FT (12/17): US tech stocks slide as Oracle data centre setback reignites AI concerns
US tech stocks fell on Wednesday, as news that Oracle has lost a key backer for a data centre project reignited investor concerns over soaring spending by artificial intelligence companies and the debt that is funding it.
The tech-heavy Nasdaq Composite dropped 1.8 per cent in New York to finish at its lowest level since late November. Oracle fell 5.4 per cent.
The declines for the software company came after the Financial Times reported that Blue Owl Capital, the primary backer for Oracle’s data centre projects in the US, will not fund a $10bn data centre in Michigan.
2.4
FT (12/18): Amazon overhauls AI team as chief declares an ‘inflection point’
Amazon has announced a management shake-up, including the departure of its artificial intelligence chief, as the company prioritises catching up to rivals on their advanced chips and large language models.
Chief executive Andy Jassy told employees the company had reached an “inflection point” with several technologies that required a renewed focus to “maximise potential for customers and Amazon over the long term”.
As part of the changes, Peter DeSantis, who previously headed up the company’s data centre engineering teams, will oversee a new group leading Amazon’s AI model development, chipmaking unit and quantum computing research, according to an employee memo published on Wednesday.
3. Technology
3.1
Nikkei (12/18): TSMC to install cutting-edge 3-nm chip tools in Arizona next summer
Taiwan Semiconductor Manufacturing Co. plans to start moving chipmaking tools into its second plant in Arizona around the summer of 2026, paving the way to begin 3-nanometer production by 2027, Nikkei Asia has learned.
3.2
Chosun Daily (12/18): Samsung Develops, Supplies SOCAMM2 to NVIDIA
Samsung Electronics has reportedly developed a server memory module called ‘SOCAMM2’ (SOCAMM2) based on low-power DRAM (LPDDR) and supplied prototypes to NVIDIA.
3.3
Bloomberg (12/17): AI Chip Startup Mythic Raises $125 Million in Bid to Take on Nvidia
Chip startup Mythic Inc. has raised $125 million in a new funding round, money that will help support its attempt to challenge Nvidia Corp. in the lucrative market for artificial intelligence processors.
Mythic, which tapped Nvidia veteran Taner Ozcelik as its chief executive officer last year, raised the money from a group led by venture firm DCVC, according to a statement Wednesday. The investors also included New Enterprise Associates, Atreides Management, SoftBank Group Corp., Honda Motor Co. and Lockheed Martin Corp.
The company has a novel approach to crunching the large amounts of data needed to run AI software. Its technology relies on analog chips, which use far less power than the digital components that typically serve as the brains of computers.
3.4
Reuters (12/17): Google works to erode Nvidia’s software advantage with Meta’s help
Alphabet’s Google is working on a new initiative to make its artificial intelligence chips better at running PyTorch, the world’s most widely used AI software framework, in a move aimed at weakening Nvidia’s longstanding dominance of the AI computing market, according to people familiar with the matter.
3.5
TrendForce (12/18): Meta Reportedly Taps Korea’s Sapien Semiconductors for Micro LED AR Glasses Backplanes
South Korea’s Sapien Semiconductors is expected to supply backplanes—chips that control Micro LED pixels—for Meta’s Micro LED (LEDoS)-based AR glasses scheduled for release in the second half of 2027. The report adds that Sapien Semiconductors is in discussions to outsource contract manufacturing to U.S. foundry GlobalFoundries.
As the report notes, Micro LED is an area where the smart glasses industry is accelerating commercialization. While the smart glasses component sector has so far been dominated by Chinese companies, South Korean component makers are increasingly gaining traction with major tech players such as Meta in display components.
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