Micron Proves the Memory Supercycle is Still Accelerating

The peak is a mirage

Wall Street loves to call the top. Analysts spent the last quarter of 2025 whispering about a semiconductor glut. They were wrong. The data suggests we are not even close to the ceiling. Micron Technology ($MU) remains the primary beneficiary of a structural shift in how data is processed. This is no longer a commodity cycle. It is a specialized architectural revolution. High Bandwidth Memory (HBM) has fundamentally decoupled from the traditional DRAM market. The old rules of cyclicality have been discarded by the sheer gravity of AI compute requirements.

The HBM4 transition begins

Supply remains tight. Demand is inelastic. Micron has already signaled that its HBM capacity for the entirety of the year is effectively sold out. This creates a floor for pricing that previous cycles never enjoyed. Per recent reporting from Reuters, the transition to HBM4 is accelerating faster than the industry anticipated. This is not just about capacity. It is about thermal efficiency and stack height. Micron is currently leading the charge with its 12-layer and 16-layer HBM3E solutions. The competition is struggling to maintain yields at these complexities. This yield gap is where the alpha lives. If you cannot produce the stack, you cannot participate in the margin expansion.

Visualizing the Revenue Trajectory

The following chart illustrates the projected quarterly revenue growth for Micron’s specialized memory division through the end of the current fiscal period. The data reflects the compounding effect of HBM adoption across enterprise data centers.

Margin expansion through technical complexity

Standard DRAM is a race to the bottom. HBM is a race to the top. The cost of entry into the HBM4 era is astronomical. It requires advanced packaging techniques that most second-tier players cannot afford. This creates a triopoly between Micron, SK Hynix, and Samsung. However, Micron’s power efficiency metrics have given it a distinct edge in the current procurement cycle. Hyperscalers are no longer just looking at gigabytes. They are looking at watts per gigabyte. Power is the ultimate constraint in the modern data center. Micron’s ability to deliver higher performance at a lower power envelope is the reason their order book is overflowing.

The death of the inventory correction narrative

Skeptics point to inventory levels at PC and smartphone manufacturers. They are looking at the wrong tail. The PC market is a rounding error compared to the GPU clusters being built in the desert. Every NVIDIA Blackwell B200 unit requires a massive amount of high-speed memory. As Bloomberg noted in yesterday’s market wrap, the capital expenditure from the “Magnificent Seven” shows no signs of slowing. They are building the infrastructure for the next decade. Micron is the toll booth on that highway. The idea that we have reached a peak when the first wave of HBM4-enabled GPUs hasn’t even hit the shelves is mathematically illiterate.

Capital expenditure as a weapon

Micron is spending aggressively. This scares the legacy investors who remember the busts of the early 2000s. But this capex is targeted. It is going into EUV (Extreme Ultraviolet) lithography and advanced packaging. These are moats. You cannot build a modern HBM stack in an old fab. The barrier to entry is now measured in tens of billions of dollars. This protects the incumbents. The market is finally rewarding discipline and technical superiority over raw volume. We are seeing a fundamental re-rating of the semiconductor sector from “cyclical hardware” to “essential infrastructure.”

The next data point to watch is the February 15 production yield report from the Idaho facility. If Micron confirms that HBM4 yields are exceeding 60 percent on the initial pilot lines, the current valuation models will need to be revised upward immediately. The supercycle isn’t ending. It is just finding its second gear.