How does Micron step up its DRAM efforts?

Chipmaker Micron Technology (MU) recently launched mass production of 16GB DDR4 products using 1nm (nanometer) processing technology. With that, Micron became the first memory chip company to step up its DRAM efforts with the smallest DRAM node.

The production of 16GB DDR4 products using the 1z nm node consumes less power. Notably, DDR4 products would reduce energy consumption by 40% over previous 8 Gb DDR4 products. The smaller 1z nm node also has a higher density and can work better in the modern data center. Micron's new products would be integrated with a variety of customer applications, including artificial intelligence, 5G, autonomous vehicles and mobile devices.

Micron LPDDR4X DRAM for smartphones

In addition, Micron has also begun shipping bulk 4-channel DRAMs (LPDDR4X) with dual data rates and low power consumption for smartphones. Notably, Micron's 1 nm nm LPDDR4X is 16 Gb monolithic DRAM and is designed to exploit emerging 5G mobile technology. Thus, the new Micron DRAM with 5G technology could enhance the smartphone user experience. Micron's LPDDR4X comes at a time when consumers are demanding memory and high-capacity storage for mid-range to high-end mobile devices.

The Micron LPDDR4X is also available in a multi-chip (UPS-based) package to provide mobile device manufacturers with extended battery life in low power mode. Micron's 1 nm nm LPDDR4X products also offer the lowest power consumption and speed of up to 4,266 megabits per second.

Micron Mobile Business Unit

Micron has generated $ 1.2 billion in revenue from its mobile business unit in the last quarter published. The unit's revenues decreased 33% year-over-year and 27% sequentially due to lower shipments to Huawei. Chinese Huawei's trade restrictions also hurt Micron's DRAM and NAND sales in the third quarter.

In May, President Trump banned US companies from trading with Huawei for reasons of national security. This trade ban has resulted in commercial losses for technology giants such as Google, Intel and Qualcomm.

Huawei accounted for nearly 13% of Micron's revenues in the first two quarters of fiscal 2019. Faced with the decline due to Huawei's trade ban, Micron's new smartphone DRAM is expected to boost the Mobile Business Unit.

Micron struggles with falling DRAM and NAND prices

DRAM chips are used primarily in PCs, smartphones, and other devices, while NAND chips provide long-term data storage. However, the company is witnessing a drop in memory prices over the past year due to an oversupply of chips.

Key customers of Micron, NVIDIA (NVDA) and Intel (INTC), also suffered from the constraints of chip offerings. As a result, Micron's investment in next-generation DRAM chips should help fight the falling price of chips.

Micron expects the DRAM market to return to marginal growth in the second half of 2019. At the same time, the manufacturer expects a stabilization of the NAND market in the second half of the year.

Course movement

The Micron stock has returned to over 37% since the beginning of the year. In comparison, comparable companies in Micron, NVIDIA and Advanced Micro Devices (AMD) posted returns of 19.8% and 68.9%, respectively, this year. However, Intel has only gained 1% since August 16th.