Shares of Micron Technology (MU 3.21%), a memory semiconductor manufacturer, rocketed higher today after Applied Materials said it was partnering with Micron to speed up the development of advanced memory for artificial intelligence applications.
Micron's memory chips are a key component of AI data centers, but there have been some concerns that the company may not be able to produce enough processors to keep up with demand. This latest news is helping to ease those fears, and causing Micron's stock to rise 5.1% as of 2:17 p.m. E.T.
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The memory business is booming
Applied Digital and Micron said in a press release today that the companies are working together "to accelerate development of advanced DRAM, high-bandwidth memory and NAND storage for future AI applications." The two companies will also share some joint research and development efforts from their engineering teams to "strengthen the semiconductor innovation pipeline in the United States."
Applied Digital is a major supplier of manufacturing equipment to Micron, so it's not surprising that the two companies announced a partnership. But what's notable about the news is the scope of the collaboration. Teams from both companies will work together to collaborate on the development of next-generation materials, process technologies, and architectures for high-bandwidth memory (HBM), DRAM, and NAND, specifically for AI.
That's especially notable because Micron's memory processors have been in such high demand that management said at the end of last year that it was "more than sold out." Expanding its partnership with Applied could help Micron meet rising customer demand and help the company continue to take full advantage of the artificial intelligence boom.
NASDAQ: MU
Key Data Points
Micron is well-positioned for more growth
Micron will report its second-quarter results on March 18, with management expecting revenue of $18.7 billion and non-GAAP diluted earnings per share (EPS) of $8.42, both at the midpoint of guidance. That represents a massive increase from its sales of $8 billion and EPS of $1.56 in the year-ago quarter.
With the company's surging memory demand thanks to AI and its new partnership to advance its semiconductor pipeline, Micron appears to be on track to track for more growth ahead.
