BofA: US Semis
> Chinese Open LLMs Drive Memory Demand: Recent open-source and open-weight model releases from China (such as Moonshot AI’s Kimi K3) do not threaten memory demand; rather, they reinforce a bullish thesis for memory and Micron Technology (MU).> API Pricing vs. Hardware Requirements: Aggressive Chinese API pricing (up to 5-350x cheaper than Western models) reflects business-model choices and market-share strategies rather than lower hardware costs. For example, Kimi K3 still requires roughly 1.4 TB of High Bandwidth Memory (HBM) per serving instance.> Non-Hardware Cost Advantages: Chinese model providers achieve cost advantages through architectural efficiency (such as Mixture of Experts [MoE] sparsity, MLA/hybrid attention, and native quantization) and infrastructure efficiencies (lower local electricity, labor, and land costs, alongside potential state-linked subsidies).> Open Models Expand Memory Sockets: Unlike closed models where millions of users share a single centralized HBM pool, open-weight models are downloaded and self-hosted across thousands of separate enterprise, cloud, and sovereign endpoints, multiplying global memory and storage sockets.> Scaling Outpaces Compression: While compression techniques and active-parameter sparsity reduce compute intensity, total model parameter sizes continue to scale up drastically (e.g., Kimi K3 reaching 2.8 trillion parameters), driving continuous demand for multi-tier memory hierarchies (HBM, DRAM, and NAND). > Micron Technology (MU) Outlook: BofA reiterates its Buy rating on Micron with a $1,550 price objective, citing limited competitive threat from China's CXMT (which focuses on underserved consumer DRAM rather than advanced HBM3E/HBM4) and upcoming catalysts like the expiration of CHIPS Act buyback restrictions in late 2026.$Micron Tech(MU.US) $DRAM $EWY
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