[Column] Can US Micron Be Dismissed as a Perpetual Third Place?

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‘The comeback of the perennial third place has begun.’

The market was stirred by news that Micron, the third-largest memory semiconductor company in the U.S., has started mass production of the 5th generation High Bandwidth Memory (HBM) product, HBM3E. Micron, a latecomer to the HBM market, announced that it will supply the new HBM product to U.S. Nvidia ahead of Samsung Electronics and SK Hynix.

The domestic semiconductor industry, while evaluating this news as unlikely to cause major market changes, appeared quite surprised. Micron, which held a negligible single-digit market share in the HBM market, skipped a generation to mass-produce the latest HBM product, prompting a busy investigation into the background of this move.

The market also showed a strong reaction to Micron’s actions. Micron’s stock price rose 4.02% in a single day on the 26th (local time) and increased another 2.67% the following day. This contrasts sharply with SK Hynix’s stock price, which fell 4.94% on the 27th due to concerns over intensified HBM competition.

The most notable part of the Micron news is that Nvidia was explicitly named as the supplier in the related press release. It is customary in the semiconductor industry not to disclose customers. Not following this convention is highly significant. Moreover, Nvidia is such a powerful customer that even Samsung Electronics and SK Hynix, who do business with them, do not comfortably disclose the company name. Micron’s specific mention of Nvidia indicates strong confidence in this product launch. Nvidia accounts for the largest demand in the HBM industry, and how much HBM is supplied to Nvidia can determine the manufacturers’ performance and market share fortunes.

Of course, Samsung Electronics and SK Hynix are dominant players boasting over 90% market share in the HBM market. Both companies are actively responding to the market by increasing HBM production capacity. The immediate possibility of Micron’s move overturning the market landscape is low.

However, considering the semiconductor industry’s principle that there is no eternal leader, it is not advisable to dismiss the warning signs simply because Micron’s market share is low. Micron is expressing confidence in the market, expecting HBM sales worth hundreds of millions of dollars this year, and domestic companies should maintain vigilance and focus on enhancing their HBM technology capabilities.

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