I'm betting for a double-bottom formation from $MUAreas of AI outside of HBM continue to be strong, but there are important caveats to consider. In contrast to HBM where bits and pricing are committed through next calendar year eSSD and 128GB RDIMMs are likley to see narrowing margins from here given higher levels of competition in the second half. For high capacity memory modules SK Hynix had a monopoly for most of last year, but as Micron and Samsung have entered the market with non TSV based solutions MS Research Analysts expect the price premium to shrink materially from here even as volumes continue to rise. Something MS Research Analysts are hearing about now from our recent checks. Despite the underhyped nature of high capacity RDIMM demand Micron's guidance is that those products will contribute a similar "several hundred million" of revenue this FY, so that does matter when thinking about MUs overall AI exposure.
In NAND weakness in consumer and mobile markets should be pushing more bits towards datacenter applications, at the same time WDC plans to have a more material presence in the DC market in the second half where they have traditionally had well below their overall market share. MS Research Analysts expect all the AI products to continue to be margin accretive for some time, but in some areas that degree does seem likely to become smaller by year end.
