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<Research> Citi Raises Micron Technology, Inc. (MU.US) TP to USD840, Expects Further HBM Price Hikes Next Year
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Citi issued a report raising the TP for memory chip leader Micron Technology, Inc. (MU.US) from USD425 to USD840, equivalent to 8x its projected FY2027 P/E ratio. The broker expects Micron to increase DRAM prices by 40% in its fiscal second quarter ended February, following Samsung Electronics (005930.KS), which raised prices by 100% in 1Q this year. Citi reiterated its Buy rating on Micron. The broker expects the upcycle in DRAM to continue through 2027 and forecasts further increases in HBM pricing next year. It also raised its FY2027 reported EPS forecast (excluding stock-based compensation impact) by 10%. The report noted that most DRAM price hikes this year were concentrated in commodity or non-HBM categories, mainly due to supply-demand imbalance. While Citi expects DRAM bit shipment growth to reach around 30% by end-2026, considering equipment manufacturers such as Applied Materials, Inc. (AMAT.US) recently guided for 30% growth in silicon systems sales, additional wafer capacity will still be required to meet AI demand in 2027. Citi revised its forecasts in line with its house view, projecting that DRAM average selling prices will rise 200% YoY in 2026, while NAND average selling prices are expected to increase 186% YoY. Citi said HBM supply remains tight. Currently, memory manufacturers lack incentives to convert capacity or add new HBM capacity, given the three to four times wafer conversion ratio and the profitability gap between HBM and commodity markets. The broker expects HBM prices to rise further in 2027 due to tight capacity. Memory manufacturers are likely to remain disciplined in expanding supply to avoid potential cuts in HBM usage in AI data centers next year. Citi noted that Cisco Systems, Inc. (CSCO.US), in response to strong pricing last week, has reduced DRAM usage by 50% across more than 20 projects, including wireless products. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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