Micron's DRAM Supply Temporarily Hit by Taiwan Earthquake, But Long-Term Outlook Remains Strong
Portfolio Pulse from Anusuya Lahiri
Micron Technology Inc (NASDAQ:MU) announced a temporary reduction in DRAM supply due to an April 3 earthquake in Taiwan, affecting up to a mid-single-digit percentage of its calendar quarter supply. Despite the disruption, Micron's long-term DRAM production capacity remains unaffected. The chips are crucial for Nvidia Corp's (NASDAQ:NVDA) H200 GPUs for AI applications, with Micron seeing a surge in demand, especially from the AI sector. Taiwan Semiconductor Manufacturing Co (NYSE:TSM) also faced temporary disruptions but expects a swift recovery. Micron's stock has surged over 96% in the last 12 months, with exposure available through REX FANG & Innovation Equity Premium Income ETF (NASDAQ:FEPI) and Invesco Semiconductors ETF (NYSE:PSI).
April 11, 2024 | 6:26 pm
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POSITIVE IMPACT
REX FANG & Innovation Equity Premium Income ETF (NASDAQ:FEPI), which includes Micron in its holdings, may see a positive impact due to Micron's strong performance and outlook.
Given Micron's significant role and positive performance, ETFs like FEPI that hold Micron stocks could benefit from Micron's strong market position and outlook.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Micron's temporary DRAM supply reduction due to the Taiwan earthquake may cause short-term stock volatility, but its unaffected long-term outlook and surging demand, especially from the AI sector, suggest a positive trend.
Despite the temporary supply disruption, Micron's unaffected long-term production capacity and the booming demand for its DRAM chips, particularly for AI applications, are likely to sustain its stock's upward trajectory.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Nvidia's supply chain remains unaffected by the Taiwan earthquake, maintaining stability in its operations and potentially benefiting from the continued demand for its H200 GPUs powered by Micron's DRAM chips.
Nvidia's unaffected supply chain, despite the earthquake, and the high demand for its GPUs that use Micron's DRAM chips, suggest a positive short-term impact on its stock.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Invesco Semiconductors ETF (NYSE:PSI), which includes Micron among its holdings, could see a positive impact from Micron's robust demand and unaffected long-term outlook.
As Micron plays a crucial role in the semiconductor sector, ETFs like PSI that include Micron could experience positive effects from Micron's strong performance and future prospects.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
TSMC faced temporary disruptions due to the Taiwan earthquake but expects a swift recovery, minimizing potential negative impacts on its stock in the short term.
TSMC's effective safety protocols and quick recovery of tool functionality at its facilities, including the advanced Fab 18, suggest a minimal negative impact on its stock in the short term.
CONFIDENCE 85
IMPORTANCE 85
RELEVANCE 90