Micron predicts new wave of server consolidation • The Register

Micron has instructed traders it expects a brand new spherical of server consolidation so as to add to its already robust development.

The reminiscence big on Wednesday introduced its This autumn FY 2024 outcomes, which noticed income of $7.75 billion – up 93 p.c 12 months over 12 months – and web earnings of $887 million. Full 12 months income of $25.1 billion was $9.5 billion up from the prior 12 months, and web earnings improved from final 12 months’s $5.9 billion loss to $778 million of black ink.

It is 2024, so it is not going to shock that president and CEO Sanjay Mehrotra attributed a few of its gross sales spike to demand for memory-hungry AI servers. He additionally had the nice obligation of reminding traders that Micron has already offered all of the high-bandwidth reminiscence (HBM) it plans to make this 12 months and subsequent, and guaranteed that the biz has taken steps to make sure its manufacturing operations can meet demand.

Mehrotra predicted datacenter demand will stay robust in 2025 – helped by low-single-digit share vary development for conventional servers.

“We count on conventional server demand to learn from a refresh cycle, as a single latest-generation conventional server can exchange a number of older-generation servers to supply worthwhile house, energy and efficiency enhancements to enhance datacenter effectivity,” Mehrotra defined.

That is a reference to the forthcoming launch of next-gen datacenter CPUs from Intel and AMD, which is able to deliver a whole lot of cores to servers in 2025. Each chipmakers have predicted their manycore choices will spark a brand new wave of server consolidation, and Mehrotra seems to agree.

Micron wins in any occasion. “We see rising DRAM and NAND content material each in conventional in addition to AI servers,” Mehrotra famous in prepared remarks.

The CEO was additionally upbeat concerning the AI PC, saying producers have began shopping for reminiscence already, as a result of they worry having to compete with datacenter patrons. AI PCs additionally want extra reminiscence and storage.

“Main PC OEMs have not too long ago introduced AI-enabled PCs with a minimal of 16GB of DRAM for the worth section and between 32GB to 64GB for the mid and premium segments, versus a median content material throughout all PCs of round 12GB final 12 months,” Mehrotra revealed. The CEO additionally pointed to AI-enabled smartphones at present transport with 12GB to 16GB of DRAM, in comparison with a median of 8GB in flagship telephones final 12 months.

Mehrotra instructed traders Micron’s new manufacturing course of – 1-gamma, which works at 10nm – is on monitor to supply product in 2025, and its 1-beta DRAM and G8 and G9 NAND nodes are ramping in excessive quantity and “will develop into an rising portion of our combine by means of fiscal 2025.” That G8 node produces 232-layer NAND.

Execs did not point out Micron’s troubles in China, the place it was banned for obscure causes. The surge in income maybe rendered that matter irrelevant. China was talked about within the context of labor to develop a manufacturing unit in Xi’an, which is outwardly going effectively. So is development of an meeting and check facility in India. Mehrotra additionally reported “progress on the development for our new fab in Idaho” and on acquiring permits to construct one other facility in New York state.

Steering for Q1 2025 was for $8.7 billion, plus or minus $200 million – which might signify a $4 billion improve on Q1 2024 income. No marvel Micron’s share worth popped from round $95 to nearly $110 in after-hours buying and selling. ®