Micron Technology has forecast its first-quarter revenue to be above market estimates, driven by strong demand for its high-bandwidth memory chips (HBM) used in artificial intelligence (AI) applications. The company’s HBM revenue grew to nearly $2 billion in the fourth quarter, with a projected annualized run rate of nearly $8 billion.
The growth is attributed to increased competition among memory suppliers vying to supply Nvidia’s HBM chips for its AI development efforts. Micron expects to lock in deals for all of its HBM chips by 2026 and has secured pricing agreements for the more advanced HBM4E chip, with prices expected to increase as the technology advances.
The company also forecasted an adjusted gross margin of 51.5%, exceeding estimates, thanks to higher-than-expected pricing for its HBM chips. Micron’s shares rose on the news, and the company has received a $6.2 billion government subsidy under the CHIPS and Science Act.
While the government is exploring changes to grant agreements with chipmakers, including Intel, Micron does not expect any changes to its own agreement. The partnership between Alibaba and Nvidia also announced plans for global data center expansion and new AI products, solidifying the growing importance of HBM in AI development.
Source: https://www.reuters.com/technology/micron-forecasts-first-quarter-revenue-above-estimates-2025-09-23