Nvidia's Shift Could Spell Trouble for Micron's High-End Memory Business
Nvidia's recent move has sent shockwaves through the tech industry, particularly for Micron Technology. The company's stock price has risen over 500% in the past year, but a closer look at Nvidia's plans and designs reveals a potential downside risk for Micron before 2029 is over.
The key to understanding this situation lies in Nvidia's supply commitments, which have jumped from $119 billion to $279 billion tied to memory buying. This large number is significant, but it's essential to note that spending drops to almost nothing after fiscal 2029, according to The Wall Street Journal.
More important than the numbers, however, are Nvidia's design choices. As analyst Ming-Chi Kuo reported in August, Nvidia revived its Rubin CPX project with stacked memory instead of the original plan using GDDR7. This move indicates that Nvidia is testing how little premium memory it can get away with in parts of the workload that don't need it.
Micron's expansion plans also add to the risk. The company aims to double its monthly output of stacked memory by the end of this year, but it may be losing its position in the market. Samsung Electronics has already reached a 33% share of the stacked memory market, while Micron slipped to 18%, according to Counterpoint Research.