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Investing.com -- Micron Technology (NASDAQ:MU) stock declined 3.5% Friday after hitting an all-time high Thursday, as Samsung Electronics secured a critical qualification from Nvidia (NASDAQ:NVDA) for its 12-layer HBM3E memory chips.
According to the Korea Economic Daily, Samsung recently passed Nvidia’s qualification tests for its fifth-generation 12-layer HBM3E product after several failed attempts. While Samsung will initially be Nvidia’s third supplier behind SK Hynix and Micron with limited volumes, the qualification represents a significant milestone for the Korean tech giant.
The development comes as Samsung appears to be gaining an edge in the race to meet Nvidia’s demanding specifications for next-generation HBM4 memory. Nvidia has requested suppliers to achieve HBM4 data transfer speeds exceeding 10 gigabits per second, significantly higher than the current industry standard of 8 Gbps. Samsung has reportedly demonstrated 11 Gbps speeds, outpacing SK Hynix’s 10 Gbps, while Micron is struggling to meet these requirements.
Samsung plans to ship large volumes of HBM4 samples to Nvidia this month to secure early qualification. The company has already been qualified by AMD and has shipped HBM3E 12-High chips to them.
Wells Fargo analyst Andrew Rocha noted this development could be "an incremental negative for HBM pricing," especially if Samsung discounts its products to gain market share. Rocha added that with Micron’s stock now close to $170, "expectations into next week are high" for the company’s upcoming earnings report.
Despite these concerns, Wall Street analysts remain bullish on Micron. TD Cowen analyst Krish Sankar raised his price target on the stock to $180 from $150 while maintaining a Buy rating.
"We think MU stock will continue its outperformance in the short term as checks continue to support that momentum," Sankar noted. "Typically, this part of the cycle puts more emphasis on ASP trends as we do not expect much multiple expansion from here, but rather continued growth in book value."
Similarly, Barclays analyst Tom O’Malley raised his price target to $175 from $140 while maintaining an Overweight rating on Micron shares.
JPMorgan analyst Sandeep Deshpande viewed Samsung’s qualification as "a positive development for the semi-cap players, particularly for ASML in Europe, as it brings the memory leader back into the advanced HBM race after lagging SK Hynix and Micron." Deshpande noted that Samsung has available cleanroom space allowing it to install equipment quickly to scale production.