MU—When the super cycle collides with capital expenditure expansion, when will the supply-demand inflection point arrive

Micron Technology is enjoying the substantial benefits brought by the AI-driven super cycle of storage chips, but experienced traders understand that the biggest certainty in the storage chip industry is the cycle itself. While everyone is immersed in the frenzy of HBM supply shortages, a deeper question is emerging: Are the capital expenditure races among the three giants laying the groundwork for the next round of oversupply?

The current supply and demand pattern for HBM is indeed extremely tight. Each AI acceleration card requires multiple HBM chips, and capacity expansion for HBM is far more difficult than traditional DRAM. The yield ramp-up in advanced packaging stages takes time, and the high precision requirements of through-silicon via (TSV) processes pose significant technical barriers, making the speed of HBM supply release far behind the explosive demand. This provides Micron with an excellent time window—the gross margin of the company's latest HBM3E products is significantly higher than traditional DRAM, and has become the core engine driving overall profit margin growth.

However, the market trades on expectations, not the present. In recent quarters, Micron, SK Hynix, and Samsung have announced large-scale capital expenditure plans to expand HBM production lines and advanced packaging capacity. Industry analysts estimate that by 2027, the total global HBM capacity could grow more than threefold from current levels. As these new capacities come online, the supply-demand gap will gradually narrow, and a phase of oversupply may even occur. This is not a question of "whether it will happen," but "when it will happen." For Micron investors, the key is to judge the duration of this super cycle and to adjust positions in a timely manner before the cycle peaks.

Additionally, another concern in the storage chip industry stems from weak demand outside of AI. While traditional server, PC, and smartphone storage needs have somewhat rebounded, the recovery is not robust, and the growth ceiling in the consumer electronics market is already clear. If the marginal growth of AI demand begins to slow and the recovery of traditional demand falls short of expectations, the storage chip industry may face an awkward situation of "AI alone cannot support."

On the technical side, MU's stock price has experienced a significant rise this year, with volatility notably increasing, indicating that bullish and bearish divergences are intensifying. For traders, the current stage makes chasing high less attractive in terms of risk-reward ratio compared to earlier in the year. It is more suitable to adopt range trading strategies, capturing short-term volatility around earnings seasons. How many more quarters do you think the storage chip super cycle can last? Feel free to share your forward-looking judgment.

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