Micron #1. 3Q25 earnings beats, guidance beats, a lot of very positive news – HBM growth is impressive, roadmap on-par with SK Hynix
there's only 1 growth driver (HBM) but its a huge one
Micron 3Q25 (May-25) beats by 13%. 4Q (Aug-25) guide beats by 14%. HBM sales accelerating. 2025 HBM revenue up 5x YoY.
HBM operating margins are ~20pct points higher than DRAM. DRAM around ~25%, HBM around ~45%.
Micron sees ~25% HBM market share in 2H25, currently~17%. HBM roadmap on-par with SK Hynix with HBM3E 12Hi cross-over in 2H25, HBM4 volume production mid-26.
Finally, HBM is sucking up significant DRAM capacity, bringing some equilibrium to DRAM supply/demand. No capacity increase Capex for NAND.
I will go thru 3Q results, 4Q guidance, FY25-27 revenue growth considering the HBM mix, and Consensus, Valuations in a 2nd post.
The stock is a Buy, assuming that:
1) We know that HBM revenues will increase a bit faster than GPU and ASIC because from HBM3E to 4 to 4E, dies size is bigger and thinner, density and speed are higher, processing time gets longer.
2) If GPU / ASIC grows at 45-60% (Cagr to 2028, that’s the range from TSMC, AMD, Marvell, which I covered here), then HBM is at the high-end of this range.
3) As HBM sucks up a lot of DRAM capacity, it creates a squeeze on conventional DRAM supply - SK Hynix and Micron want to keep it that way. The vast majority of their Capex is for HBM, DRAM capacity declines as HBM goes up, NAND capacity declines too (conversion to 3xx layers). We finally have a virtuous cycle in conventional memory.
4) There is no price competition between SK Hynix and Micron – no price competition for the sake of gaining share. It’s been the case for the past 2 years and ongoing rumors on 2026 HBM price negotiations tell it’s still the case.
5) Samsung doesn’t get qualified by Nvidia or remains 12 months behind in HBM3E 12Hi and HBM4. The market remains well behaved between SK Hynix and Micron.
6) Or if Samsung is finally qualified, it doesn’t engage in a brainless price war as the firm is notorious for.
But before that, let’s go to the crux of the Micron conf call.
What’s HBM market size?
Micron CEO said:
“With respect to HBM growth…calendar year '25, HBM is growing from last year about $18 billion to approximately $35 billion in calendar year '25.”
These estimates (2024 18bn, 2025 double or 34-35bn) come from both TrendForce and Yole. It looks like it’s becoming the industry’s benchmark, ie the commonly accepted wisdom.
I published here an HBM market size at $13bn in 2024 and that because I removed HBM 2/2E which is dominated by Samsung. To reach $18bn, I just have to add $5bn to Samsung. I think this is very misleading because:
It increase the 2024 base and hence lowers the 2025-26 growth rate
It boosts Samsung market share but that’s for obsolete products
But then, I will use this $18bn from now on, since that’s what industry players are using as their benchmark.
SK Hynix and Micron give us clear enough indications on their HBM revenues in 2024-25. We know that SK Hynix and Micron are qualified by Nvidia for HBM3E, qualified by all/most for 3E 12 Hi, close to qualified for HBM4, and that Samsung is still trailing 12 months behind. So I can use that to come up with reasonable growth assumptions.
Micron plans to reach 23-25% HBM market share
“We expect to reach HBM share similar to our overall DRAM share sometime in the second half of calendar 2025.” Micron has 24% share of conventional DRAM.
Reading the media commentary this morning, it looks like a lot of people are impressed by this 24% HBM share. It’s very impressive and imply this:
Feb-25 $1bn
May-25 $1.5bn
if HBM revenues keep increasing 50% QoQ, we get:
Aug-25 $2.2bn
Nov-25 $3.2bn
In other words,
at May-25 $1.5bn HBM revenue, the full-year run-rate is $6bn = 6/35 = 17% share
CY25 on my numbers, HBM revenue $8bn = 8/35 = 23% share
Calendar 2024; HBM revenue $1.6bn
Calendar 2025: HBM revenue $7.9bn or up 5x YoY
Calendar 2026: if total HBM market increases by 66% (table above), I assume Micron revenues will increase by 100% YoY
Calendar 2027: Micron growing in-line with the HBM market