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Micron Bets Big on HBM4E: Will Custom Chips Lift Revenues Further?
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Key Takeaways
Micron is expanding its AI memory lineup with customizable HBM4E chips built on the HBM4 platform.
A TSMC partnership enables tailored HBM4E versions for GPUs and AI accelerators, driving flexibility.
MU expects continued strong demand, higher margins, and 42.5% fiscal 2026 revenue growth.
Micron Technology, Inc. (MU - Free Report) is making a major push in the artificial intelligence (AI) memory space with its upcoming customizable high-bandwidth memory (HBM) chips, HBM4E. Following a record-breaking fiscal 2025, Micron plans to expand its high-performance memory portfolio through tailored HBM4E products designed to meet the needs of leading AI and data center customers.
The planned HBM4E line builds upon Micron’s HBM4 platform, offering increased bandwidth, power efficiency and flexibility. The company has partnered with Taiwan Semiconductor Manufacturing Company, aka TSMC, to manufacture customized base logic dies. Through this deal, Micron can offer versions of HBM4E optimized for specific customer applications, such as advanced graphics processing units and AI accelerators.
This strategy positions Micron to capture higher-margin opportunities and enhance customer loyalty in a rapidly growing market segment. Management has also noted that customized versions will likely deliver better margins than standard models, adding another layer of upside potential.
Micron’s HBM business already reached nearly $8 billion in annualized revenues in fiscal 2025, and the company expects strong demand to continue into fiscal 2026. With tight DRAM supply and rising AI-related memory needs, the new HBM4E products could lift both sales and profitability.
If Micron maintains its technology leadership and execution discipline, the HBM4E expansion could extend its revenue momentum and solidify its role as a critical supplier in the global AI memory race. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $53.27 billion, indicating year-over-year growth of 42.5%.
How Do Micron’s Rivals Stack Up in the Memory Chip Race?
Although there are no U.S. stock exchange-listed direct competitors for MU in the memory chip space, Intel Corporation (INTC - Free Report) and Broadcom Inc. (AVGO - Free Report) play key roles in the HBM supply chain and AI hardware ecosystem.
Intel is developing its AI accelerators that rely on high-performance memory like HBM. Although Intel doesn't manufacture HBM chips, its Gaudi AI accelerators will require a robust HBM supply, and any shift in memory partnerships could impact Micron's position. Notably, Micron is one of the major suppliers of HBM for Intel’s Gaudi AI accelerators.
Broadcom designs custom application-specific integrated circuits used in AI infrastructure that often include integrated HBM. As demand for Broadcom’s AI chips grows, it could influence how HBM suppliers like Micron allocate their future supply.
Micron’s Price Performance, Valuation and Estimates
Shares of Micron have risen around 128.1% year to date compared with the Zacks Computer – Integrated Systems industry’s gain of 64.1%.
Micron YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MU trades at a forward price-to-earnings ratio of 11.4, significantly lower than the industry’s average of 22.81.
Micron Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 and 2027 earnings implies a year-over-year increase of 100% and 12%, respectively. Bottom-line estimates for fiscal 2026 and 2027 have been revised upward in the past 30 days.
Image: Shutterstock
Micron Bets Big on HBM4E: Will Custom Chips Lift Revenues Further?
Key Takeaways
Micron Technology, Inc. (MU - Free Report) is making a major push in the artificial intelligence (AI) memory space with its upcoming customizable high-bandwidth memory (HBM) chips, HBM4E. Following a record-breaking fiscal 2025, Micron plans to expand its high-performance memory portfolio through tailored HBM4E products designed to meet the needs of leading AI and data center customers.
The planned HBM4E line builds upon Micron’s HBM4 platform, offering increased bandwidth, power efficiency and flexibility. The company has partnered with Taiwan Semiconductor Manufacturing Company, aka TSMC, to manufacture customized base logic dies. Through this deal, Micron can offer versions of HBM4E optimized for specific customer applications, such as advanced graphics processing units and AI accelerators.
This strategy positions Micron to capture higher-margin opportunities and enhance customer loyalty in a rapidly growing market segment. Management has also noted that customized versions will likely deliver better margins than standard models, adding another layer of upside potential.
Micron’s HBM business already reached nearly $8 billion in annualized revenues in fiscal 2025, and the company expects strong demand to continue into fiscal 2026. With tight DRAM supply and rising AI-related memory needs, the new HBM4E products could lift both sales and profitability.
If Micron maintains its technology leadership and execution discipline, the HBM4E expansion could extend its revenue momentum and solidify its role as a critical supplier in the global AI memory race. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $53.27 billion, indicating year-over-year growth of 42.5%.
How Do Micron’s Rivals Stack Up in the Memory Chip Race?
Although there are no U.S. stock exchange-listed direct competitors for MU in the memory chip space, Intel Corporation (INTC - Free Report) and Broadcom Inc. (AVGO - Free Report) play key roles in the HBM supply chain and AI hardware ecosystem.
Intel is developing its AI accelerators that rely on high-performance memory like HBM. Although Intel doesn't manufacture HBM chips, its Gaudi AI accelerators will require a robust HBM supply, and any shift in memory partnerships could impact Micron's position. Notably, Micron is one of the major suppliers of HBM for Intel’s Gaudi AI accelerators.
Broadcom designs custom application-specific integrated circuits used in AI infrastructure that often include integrated HBM. As demand for Broadcom’s AI chips grows, it could influence how HBM suppliers like Micron allocate their future supply.
Micron’s Price Performance, Valuation and Estimates
Shares of Micron have risen around 128.1% year to date compared with the Zacks Computer – Integrated Systems industry’s gain of 64.1%.
Micron YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MU trades at a forward price-to-earnings ratio of 11.4, significantly lower than the industry’s average of 22.81.
Micron Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 and 2027 earnings implies a year-over-year increase of 100% and 12%, respectively. Bottom-line estimates for fiscal 2026 and 2027 have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Micron Technology currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.