In the NAND segment there are still 6 major global players, and in theory they should expand capacity too much when prices are high, thus resulting in oversupply and downward prices where perhaps NAND becomes unprofitable to sell for a while. This is how all memory used to be 20 years ago, but only NAND is like that (perhaps) these days). Admittedly NAND is the least interesting of Micron's segments. DRAM and HBM seems like great commodity memory spaces, with limited competition (3 big boys, MU, SK and Samsung?).
One thing which may hurt Micron is it seems to still trade like a cyclical, which it was until DRAM consolidated down to three major players. So loads of MU investors are looking for the peak and when to sell, but it seems like HBM and even DRAM are just pure profitable growth engines at the moment, and demand far outstrips supply. Normally in this situation Samsung would increase Cap Ex by 10x and MU and SK would have to follow, DRAM would have massive over capacity, and everyone would lose money until the end markets absorb the elevated capacity, but ...... the memory makers of DRAM don't seem to do that any more. So it could be super high cash flow winner for a while.
I guess I might pay attention to how much Cap Ex they are constantly spending to keep the factories modern and whatnot, and how they may react to a slowdown. Everyone and their mother expects AI spending to peak and perhaps seriously stall at some point, and when that happens the entire tech market will collapse, but right now no one knows if that will happen early next year or late in 2031...... |
