Open Source Securities released a research report saying that recently, Micron Technology released its latest financial report, which far exceeded expectations and achieved a strong recovery. In terms of guidance, Micron HBM3E will supply Nvidia H200 GPU and has now achieved mass production. At present, Micron's HBM has been sold out in 2024, and its production capacity has been nearly allocated in 2025, and the supply of products is in short supply. As for NAND, Samsung Electronics plans to renegotiate prices with major mobile phone, PC and server customers in March-April 2024, which is expected to push up NAND flash prices by 15%-20%. As the sector continues to recover and demand for products such as HBM and DDR5 grows, the companies are expected to benefit fully.

The main points of open source securities are as follows:

big factory performance: FY2024Q2 Meiguang's performance far exceeded expectations, HBM3E successfully introduced into Avida

Meiguang Technology released its latest financial report, with a FY2024Q2 revenue of US $5.824 billion (previous guidance of US $51-5.5 billion), up + 58% year on year and + 23% month on month. Gross profit margin is 20%(Non-GAAP, previous guidance is 11.5~14.5), +51.4pcts year on year, +19.2pcts month on month; Net profit (Non-GAAP) was $0.476 billion, up +$2.057 billion, up +1.524 billion, the performance far exceeded expectations and achieved a strong recovery.

in terms of guidance, the FY2024Q3 company expects to achieve revenue of $64-6.8 billion, with a median of +73.68 percent year-on-year and +13.32 percent month-on-month. Gross profit margin is 25% ~ 28%, median year-on-year +42.5pcts, month-on-month +6.5pcts, and guidance continues to be optimistic. HBM, Micron HBM3E will supply Nvidia H200 GPU, has now achieved mass production, the follow-up is expected to drive the company's gross margin level, in 2024 to contribute hundreds of millions of dollars in revenue. At present, Micron's HBM has been sold out in 2024, and its production capacity has been nearly allocated in 2025, and the supply of products is in short supply.

DRAM: orders continue to rise in 2024, HBM in short supply

in terms of total production capacity, according to Jibang consulting, by the end of 2024, the overall DRAM industry plans to produce HBM TSV with a production capacity of about 250 K/m, accounting for about 14% of the total DRAM production capacity (about 1,800 K/m). the original factory continues to increase investment, and the annual growth rate of supply is expected to reach 260. In terms of proportion, HBM demand continues to be strong. Orders in 2024 have been basically locked by buyers. The proportion of DRAM output value is expected to increase from 8.4 in 2023 to 20.1 in 2024, growing rapidly.

by manufacturer, Samsung and SK Hynix have the most active capacity planning by the end of 2024, with Samsung HBM's total capacity reaching about 130 K/m (including TSV) by the end of the year. SK Hynix is about 120 K/m. Judging from the mainstream HBM3 products at this stage, SK Hynix currently accounts for more than 90%, while Samsung will catch up with AMD MI300 quarterly.

NAND: the growth rate is gradually increasing, Q2 is expected to rise by 15-20%

in terms of growth rate, according to shande information reports, with the inventory adjustment and the improvement of smart phone market demand, the growth rate of Samsung Xi 'an NAND flash memory factory is continuously increasing, reaching 70% at present. At the same time, Jiaxia plans to increase the NAND growth rate to 90% within March. The growth rate of large factories has been increasing frequently recently, and the response demand is gradually improving. In terms of price, some manufacturers have recently revealed their willingness to raise prices. Huirong Technology said that the price of NAND in 2024Q2 is expected to rise by 20%. Samsung Electronics plans to renegotiate prices with major mobile phone, PC and server customers in March-April 2024, which is expected to push up the price of NAND flash memory by 15%-20%.

Beneficiary:

Open Source Securities pointed out that as the sector continues to recover and demand for products such as HBM and DDR5 grows, related companies are expected to fully benefit.

(1) Storage chips: Zhaoyi Innovation (603986.SH), Pran shares (688766.SH), Dongxin shares (688110.SH), Beijing Junzheng (300223.SZ), etc.

(2) Storage modules: Jiang Bolong (301308.SZ), Demingli (001309.SZ), Co-creation Data (300857.SZ), Biwin Storage (688525.SH), etc.

(3) Storage interface: Lanqi Technology (688008.SH), Juchen shares (688123.SH), etc.

(4) Storage Sealing and HBM Industry Chain: Changdian Technology (600584.SH), Tongfu Micropower (002156.SZ), Huatian Technology (002185.SZ), Shannon Core (300475.SZ), etc.

Risk Warning: Demand recovery is less than expected, industry competition intensifies, the company's new product research and development progress is less than expected.