$Micron Tech(MU.US)$Sandisk(SNDK.US)$Western Digital(WDC.US)

At the Wolfe Research Automotive, Auto Tech, and Semiconductors Conference on February 11, 2026, the speech by Micron executives completely dispelled market concerns about HBM competition and the industry cycle. The following are the key takeaways from this presentation:

1. HBM: Demand is Fully Booked, Supercycle Extended to 2028

1. Orders and Capacity: Fully Saturated, No Inventory Pressure

Micron clearly stated that its 2026 HBM capacity has been fully booked by customer orders, and it is currently in a state of "selling as much as it can produce." The supply-demand imbalance is expected to last at least until 2028. This directly addresses market concerns about Samsung's HBM4 mass production squeezing market share. As a core supplier, Micron's share and pricing power have not been materially threatened.

2. Technology and Products: Smooth Progress on HBM4, Active Customer Validation

Regarding the next-generation HBM4 technology, Micron revealed that R&D progress is on track. It has already begun joint validation with leading AI customers like NVIDIA, with the mass production timeline having minimal gap compared to competitors. Meanwhile, the current flagship HBM3E product still holds a leading edge in performance and power efficiency, fully supporting the demand for NVIDIA's main GPU models like the H200 and B200.

3. Market Size: TAM to Triple in Three Years, Driven by AI Boom

Micron raised its HBM market size forecast, expecting the total addressable market (TAM) for HBM to reach $100 billion by 2028, a threefold increase from $35 billion in 2025. This growth is primarily driven by scenarios such as AI data centers and edge computing. As a "bottleneck component" for AI computing power, the demand growth rate for memory will continue to outpace the industry average.

II. Memory Industry: Prices Continue to Rise, Supply-Demand Shortage Becomes Structural

1. DRAM/NAND Prices: Significant Sequential Increase, Shortage Covers All End Markets

Micron pointed out that DRAM and NAND flash prices have entered a sustained upward trend. Not only is demand strong from the AI server side, but memory shortages in traditional end markets like consumer electronics and automotive electronics are also intensifying.

2. Supply Constraints: Slow Capacity Expansion, Shortage to Last at Least Until 2028

Consistent with Deutsche Bank's previous view, Micron emphasized that new DRAM fabs take at least two years to become operational. Expansion capabilities of existing fabs are limited and cannot quickly alleviate demand pressure. The supply shortage is no longer a short-term cyclical phenomenon but a "structural shortage" caused by the AI demand boom. The industry's profitability cycle will be significantly extended.

III. Profitability and Capital Expenditure: 2026 EPS Forecast Raised, All-In Bet on AI Memory

1. Profit Outlook: EPS Expected to Exceed $50, Valuation at Low Levels

Combined with Morgan Stanley's same-day forecast raising Micron's target price to $450, Micron's fiscal year 2026 earnings per share (EPS) are expected to reach $52.53. The current stock price implies a fiscal 2026 P/E ratio of only about 11x, which is at a low point in the industry cycle.

2. Capital Expenditure: $20 Billion for Full-Scale Capacity Expansion, Focused on AI Core Products

Micron confirmed its fiscal 2026 capital expenditure (capex) of $20 billion, all dedicated to expanding AI-related capacity such as HBM and 1-gamma DRAM. The construction progress of new fabs in Idaho and New York is on or ahead of schedule, providing support for long-term supply capability while avoiding cyclical risks from reckless capacity expansion.

Summary: The Clouds Part to Reveal the Moon, the AI Memory Cycle Has Just Begun