Micron received both positive and negative news on the same day, but investors focused on the negative. The stock fell 4.3% in premarket trading on Friday, even though Nvidia certified Micron as a supplier of its new high-bandwidth memory, HBM4, along with SK Hynix and Samsung Electronics. This good news was outweighed by weakness across the semiconductor sector and a report that Nvidia is cutting modular memory capacity in its upcoming Vera Rubin server racks. Here’s what is behind the stock move and whether demand for HBM remains strong.
Nvidia’s certification is significant. Wall Street expected all three major memory suppliers to get HBM4 approval, but earlier reports said SK Hynix and Micron were having trouble meeting Nvidia’s standards. Friday’s confirmation clears up that uncertainty and confirms Micron’s role as a supplier to the leading AI chip maker.
The drop in Micron’s stock is due to another issue. SemiAnalysis, a semiconductor research firm, reported that Nvidia is lowering the planned modular memory capacity for its Vera Rubin server racks. Modular memory is different from high-bandwidth memory. The head of SemiAnalysis later said on social media that their analysis was not meant to be negative. NVIDIA did not respond right away to requests for comment.
It’s important to understand the difference between modular memory and HBM. Each HBM unit uses about three times more semiconductor wafer capacity than standard memory. So, making more HBM means less production of other memory types and higher prices across the industry. TrendForce analysts said this week that as HBM technology grows through 2027, with bigger die sizes and more demand, the effect on regular DRAM capacity will get stronger. This should give suppliers more power in HBM price talks next year.
Micron’s stock has climbed more than 800% in the past year, making it vulnerable to sharp drops if investors decide to take profits. On Thursday, the stock fell 7.7% after Broadcom’s disappointing earnings report hurt the whole semiconductor sector, setting the stage for Friday’s decline.
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