Micron Technology Faces Supply Disruption Following Taiwan Earthquake
Chipmaker Micron Technology has disclosed potential disruptions in its dynamic random access memory (DRAM) supply following the recent earthquake in Taiwan on 3rd April.
The earthquake, which struck Taiwan, a critical hub in the global chip supply chain, is anticipated to impact Micron's DRAM production for a calendar quarter, potentially reducing it by up to a mid-single digit percentage. The company, with four locations in Taiwan, is currently not operating at full DRAM production capacity in the aftermath of the earthquake.
Despite the temporary setback, Micron reassured stakeholders that there would be no long-term implications for its DRAM supply capability. DRAM, widely used in data centers, personal computers, smartphones and other computing devices, remains a crucial component for various electronic applications.
Investors have been closely monitoring Micron's stock amidst soaring demand for its chips, particularly from the rapidly expanding artificial intelligence (AI) sector. Micron's strategic move into the production of high-bandwidth memory (HBM) chips further fueled investor optimism. The company initiated mass production of HBM chips in February, destined for integration into Nvidia's H200 graphics processing units, specifically designed for AI applications.
CEO Sanjay Mehrotra disclosed in March that Micron's HBM chips are already sold out for the entirety of 2024, with a significant portion of the 2025 supply already allocated. However, it remains unclear whether the earthquake-induced disruptions will affect Micron's HBM chip supplies, prompting continued vigilance from industry observers and investors alike.
