Micron Technology (MU 0.10%) has been flying high this year thanks to the booming demand and tight supplies of dynamic random access memory (DRAM) and NAND flash chips.

The favorable end-market conditions sent the memory specialist's revenue and earnings soaring in Q2. The good news is that Micron's momentum is unlikely to fade any time soon, and one of the reasons why that may be the case is because of the rapid growth in sales of 5G smartphones.

Let's take a closer look at how the transition to 5G is giving Micron a huge shot in the arm.

Micron Technology is winning big in mobile

The mobile business unit (MBU) was Micron Technology's best-performing segment last quarter, clocking year-over-year revenue growth of 44% and outpacing its overall revenue growth of 30%. The mobile business produced 29% of Micron's total revenue in the second quarter, generating $1.8 billion in sales. That's a step up from the year-ago period when mobile accounted for just over 26% of the total revenue.

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Micron credits the mobile business segment's terrific growth to "strong execution coupled with better-than-seasonal demand due to continuing recovery in smartphone volumes." The chipmaker says that revenue from its multichip (MCP) package reached a record during the quarter, while revenue from the LPDDR5 (the fifth generation of DRAM based on low power double data rate technology) product line tripled on a sequential basis.

This tells us that Micron's product development moves in the smartphone memory market are bearing fruit. Last year, the company had launched what it claimed to be the industry's first MCP that combined fast flash storage with LPDDR5 DRAM. The platform was aimed to deliver fast data access speeds, reduce power consumption, and lower the space occupied on printed circuit boards (PCBs) -- three factors that play an important role in boosting the memory capacity and battery life of 5G devices.

The record revenue of the MCP product last quarter indicates that it is witnessing strong adoption by smartphone original equipment manufacturers (OEMs). That's not surprising, as the platform allows smartphone makers to pack 12 GB DRAM and 512 GB NAND flash storage into 5G devices, which is turning out to be the standard configuration in the 5G era.

Micron estimates that flagship 5G devices will have at least 8 GB of DRAM and 256/512 GB of NAND flash storage. The launch of Samsung's latest Galaxy S21 devices is proof of this, with the entry-level Galaxy S21 packing 8 GB DRAM and 128 GB flash storage. The top-of-the-line S21 Ultra sports 12 GB DRAM and 256 GB storage, which goes up to a 16 GB/512 GB combination for the more expensive variant.

Micron points out that 4G-era mobile phones had DRAM/NAND configurations starting at 6 GB/128 GB. Clearly, 5G smartphones are creating a bigger content opportunity for Micron by packing in more DRAM and NAND.

This is just the beginning of terrific mobile growth

Apart from higher memory content per 5G smartphone, Micron's mobile business will get a big boost from the growth in shipments of 5G smartphones. IDC estimates that sales of 5G smartphones can jump to an estimated 540 million units in 2021, accounting for 40% of the market's overall volume. The firm estimates that 5G devices accounted for 19% of smartphone shipments last year when total shipments stood at just under 1.3 billion units.

So, 5G smartphone sales are expected to more than double this year. IDC expects shipments to hit 1 billion units in 2025 when 5G devices would account for 69% of overall smartphone volumes of 1.53 billion units. LPDDR5 DRAM is going to be the standard in 5G devices thanks to lower power consumption and higher speeds, so it is expected to account for half of the mobile DRAM market by 2023 as compared to 10% currently, according to market research firm Omdia.

As such, Micron's mobile business unit can continue clocking a high pace of growth over the next few years and lift the company's overall financial performance. This should give investors another strong reason to go long on Micron Technology, as it has the potential to become a top 5G stock in the long run.