$Micron Tech(MU.US)The impact of CXMT's capacity expansion on Micron.

1. Short-term (1-2 years): No impact on profitability

CXMT's HBM won't enter mass production until the end of 2026, with initial capacity mainly serving domestic computing clients. Small batches will be simultaneously used for international client sampling verification - these clients were never Micron's core revenue source.

Micron has established long-term supply agreements with major clients like NVIDIA and AMD for HBM, with quarterly shipment volumes and prices dynamically locked in, ensuring solid revenue and profit protection.

During this period, any market discussions about CXMT will only create emotional volatility without altering Micron's profit expectations.

2. Medium-term (2-3 years): Very limited impact on profitability

CXMT's capacity ramp and yield improvement will take time. Even in the domestic market, it can only gradually replace Micron's share rather than achieving immediate success.

Micron's primary growth driver comes from global AI server demand, which will account for an increasingly larger revenue portion - an area CXMT cannot touch in the short term.

Therefore, Micron's profit growth thesis remains intact, with only slightly slower growth in the Chinese market at worst.

3. Long-term (3-5 years): Potential risks emerge

Only if CXMT successfully enters international supply chains would it potentially suppress global HBM prices and affect Micron's gross margins. Certification timelines for leading memory clients like Micron: 6-9 months for consumer/basic DRAM; 9-18 months for server/data center/automotive-grade; 12-24 months for high-end custom products like HBM.

Following industry norms: Assuming median 18-month HBM certification, with new fab starting mass production at end-2026

4. 2026.10: New fab produces HBM samples, begins verification with Micron's key clients

5. 2028.Q1: Completes 18-month verification, obtains qualified supplier status, begins small-volume supply

6. 2028.Q3: Reaches full ramp capacity, begins bulk shipments to global markets, HBM prices start facing pressure

7. 2029.Q1: Supply shock fully transmitted, Micron's HBM gross margins show clear decline.

However, this process remains highly uncertain and would take at least 3+ years to materialize - representing a very long-term risk

Conclusion

For the next 2-3 years, CXMT's expansion won't materially impact Micron's profitability - market fluctuations will mainly be sentiment-driven. Micron's earnings growth will still be determined by AI-driven HBM demand, with this core thesis remaining unchanged