저자: ChipStockInvestor채널진행자 · 외국인
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마이크론 주가 급락 원인을 메모리 반도체의 경기 사이클로 설명하며, AI 인프라 붐은 끝나지 않았고 2025년까지 성장 전망이 유지된다고 주장. 마이크론 같은 IDM보다 장비 업체(Lam Research, Applied Materials 등)가 공정 기술을 소유해 경기 변동에도 수익성이 안정적이라 장기 투자 대상으로 더 낫다고 제시. 설명 중 스폰서(Moomoo) 및 유료 커뮤니티 홍보 포함.
다듬은 글
Hey y'all. Thanks for coming back to Chip Stock Investor. We reached a hundred thousand subs over the last weekend. And we want to say thanks again for being here. We thought we would start off this episode by saying that we've appreciated all of the comments that we've received over the last two years.
But there's one type of comment that stands out among all the rest, and that's that we are robots. You caught us, Internet sleuths. That's right. Uh, at 100, 000 subs, we thought we would finally reveal Yes, we are actually an audio visual AI that was trained on NVIDIA H100s in Oracle Cloud. We're now being inferenced in Google Cloud with a bunch of latest gen TPUs.
Yeah, congrats. Wait till we get a Blackwell upgrade. It's going to be pretty amazing. I think, and I hope that the blackwell upgrade provides us with blemish free skin. A bigger fuller beard. Kasey's going to look sexier than ever. Yeah, it's really a win win. So I hope you're okay with us being robots Keep those amazing comments coming.
We really do appreciate them. And they do provide us with good feedback, good laughs, and sometimes some irritation, but don't worry about that. Kasey is the nicest person on the planet. So if you want to be mean, she will crush your comments in her mindvice. That's right. Let's start this conversation by talking about this chart.
Pretty ugly looking Micron stock chart, huh? Doesn't look pretty. So Micron earnings are coming up in a couple of weeks. We may circle back to this topic at that point, but there's two main things we want to discuss on this episode today. First, why is Micron stock crashing and is there a better alternative?
And second, we'll address this second point right off the bat here. Some of the comments we get are asking us to cover more of the integrated device manufacturers like Micron and some of its other fellow memory chip makers like SK Hynix, Samsung, of course, also one of the big players in memory chips.
Also, some of the more industrial and power chip makers, especially those in Europe, like NXP Semi, Infineon, ST Micro. One thing that I think is perhaps overlooked by some of our viewers is we're not actually just cranking out content to get coverage. Somewhere, somehow we will cover every company in the semiconductor industry.
But our research focuses on actual research we need and we use. What we and Kasey are spending our time on. And so we're not just going to do a deep dive on every single company out there, unless it actually makes sense. That's nothing against some of the IDMs. It's just reality. We are actually making investment decisions based off of this research we're making.
So with that, let's talk about what happened with this Micron stock chart. Why the big crash from it's all time peak. Yes, is the AI infrastructure boom over? This chart we created with some help from FinChat shows the total revenue for Micron since 2014, the net income and free cashflow. This is a very cyclical looking chart.
It reminds me of one of those old wooden roller coasters. Yeah, and in really, really good times, Micron is able to turn a pretty hefty profit. That's thanks to memory chip sales, or actually unit, units of memory pricing being very high. But then when the economics kind of turn sour for a while, Micron loses money.
The financials are still a mess for Micron, probably in just normal cyclicality, but the market is definitely taking a breather on this stock. Yeah. To answer the question simply, no, the boom is not over. Micron is still forecasting significant growth through 2025. We'll circle back to that, but part of our 100, 000 subs celebration, we actually did a refresh on our semiconductor industry flow.
We've been hearing your comments that this chart is very messy and confusing. Hopefully this looks cleaner. Thanks Stacee for your help with this. Is Stacee just an AI chatbot? We'll let you guess. Is Stacee an acronym for, for our AI assistant, or is she a real person? We'll keep you guessing. Why do we say that wafer fab packaging and assembly equipment down there at the bottom center is the most critical choke point in the industry?
It's because companies like Micron, which fit into that IDM category, are purchasing equipment from all of these wafer fab, and packaging providers. They're gobbling up most of the profit. We shared this back in June, during Micron's last quarterly earnings update. And they gave this guidance on CapEx, capital expenditures.
That's what they are spending on equipment, like LAM Research, Applied Materials, ASML, we'll get to who that is. But you can see for this year, CapEx to revenue, less than 30%. Next year, fiscal 2025, it's expected to ramp back up to a mid 30 percent range, CapEx to revenue range. And in addition to that ratio increasing, Micron is still expecting a significant increase in revenue.
So this ultimately equates to a big boom in sales for the fab five. We'll talk about this a little bit more later, but one factor in this is that Micron has been reshuffling some of their equipment within their old fabs into their new fabs, and that has drawn down the percentage of revenue for memory for Lam.
You can see this is in their June quarter, 36 percent of the revenue was memory. It's been upwards of 50 percent of their revenue, historically. And so as we look out into calendar year, 2025, maybe into 2026, we're still expecting this significant boom in revenue for the wafer fab equipment companies, like Lam Research.
And it's not just us that have been talking about this being a critical choke point in the industry that you need to learn about as an investor. Perhaps, you know, who Jim Keller is. This is an interview from Anand Tech from back in 2021. Rest in peace, Anand Tech, we've appreciated all of your hard work over the years.
But in this interview back in 2021, Keller also said there's this misconception that at one point in time, apparently he also had, but this is very widespread across investors and the semiconductor industry as well. A lot of people think it's TSMC, Samsung, and Intel that own the process technology, the actual manufacturing development and all of the IP surrounding those manufacturing processes, but in all reality, it's the fab five and the other equipment providers that own that actual technology, the manufacturing smarts.
Later in the interview, he provides a quote from Richard Feynman. Who is that? Oh, that's a famous physicist that maybe you heard of in the movie Oppenheimer, played by the actor that is the son of Meg Ryan and Dennis Quaid. Probably all you need to know about Richard Feynman. No need to look up who he was and what work he did, but he mentions his quote from Feynman about there's a lot of work still to be done at the atomic level.
There are still a lot of atoms, there's a lot of room to shrink down the size of semiconductor features on chips. And so what does that mean? A lot of innovation can still be developed by the equipment makers. And so now the equipment gets developed. It gets sold and turned into revenue for companies like Lam Research, CapEx capital expense for companies like Micron.
But then it doesn't stop there. Now someone needs to figure out how to use the equipment to manufacture chips. And that's where these, equipment integration engineers come in. Companies like Micron hire integration engineers and pay them well into the six figures per year to keep them figuring out how to use these actual machines.
But then you also have the equipment providers themselves, they also hire integration engineers. And rather than being an operating expense for them, integration engineers are actually a revenue generator for the equipment providers. So if we go back again, who was making the most money, it is companies like the fab five.
The semiconductor manufacturing equipment providers, the fab five gobbles up about 70 percent of the revenue of this sub industry within the semiconductor market. Let's zoom back in on this chart that we showed you previously, total revenue for Micron and then net income and free cashflow, the pink and purple portion of the chart shows.
Money that they're spending. So where is that money going? Companies like Lam Research. Lam Research also shows some cyclicality, but not at all the same chart we were looking at with Micron. Yeah. In good times and bad, Lam Research, yes, it has ups and downs with its revenue, but its profitability actually stays in the black in good times and bad, that is a really powerful business.
And why is that? It's because Lam and the Fab Five own the process technology. Yes, they sell equipment and that is a cyclical business, but owning the actual technology behind that equipment. And then also in addition to that, helping the customers, the fabs like Micron and others, figure out how to use the equipment becomes really powerful.
So Applied Materials, doing a lot of work in materials design, and then LAM research specifically, uh, if we're talking about advanced DRAM or HBM memory that's being used in these AI and accelerated computing devices. They do a lot of work with the actual packaging of those chips. They have multiple product families geared towards this type of work.
And then, in addition to selling the equipment, like Kasey said earlier, Micron doing a lot of work in the last year shuffling equipment around. It is an equipment integration engineer that is getting paid. That shuffling of equipment is represented in that customer support and other revenue for LAM Research.
That's the orange bar. Blue bar is the equipment sales, but you can see that even during this downturn, they have still had that customer support revenue, reshuffling equipment, engineer expenses. What is an operating expense for companies like Micron and any IDM? It doesn't matter which one it could be a memory chip maker.
It could be a power or industrial chip maker. Operating expenses for actual manufacturers ends up being service revenue for companies like the fab five. So if you really want to make money with Micron, is it investing in the company? Well, I would say if you want to make money off of Micron long term, consider applying for a job at Micron and work your way up the ranks to become a process integration engineer, you will get paid in good times and bad.
And then if you want to invest long term in a stock, consider the wafer fab. And packaging companies that critical choke point in the semiconductor industry flow. One of our partners for the last couple months is Moomoo. Currently, you can get up to 15 free stocks for signing up for a trading account.
We have started using it and it is a super simple platform. Sign up with our unique code in the description and get started trading today. Also, as part of our 100, 000 subscriber celebration video, maybe we should show you the new AI generated puppy that we adopted off of the streets. The newest Semiconductor Insider.
Ah, there she is. Okay. She wants to, and she's very interested in this microphone. Not supposed to show off your kids on the internet, but, uh, I guess we're taking that risk. Don't be weird. If you'd like to have more discussion with us on this relationship between the chip manufacturers and the manufacturing equipment providers, check out Semi Insider for just five bucks a month.
That gets you access to Discord. It's where we and a growing community of, lifetime learners talk about the semiconductor industry, figure out investing best practices, and just in general, contribute to overall healthy learning environment. Skip all of the social media craziness and hype and unhealthy investing habits you may pick up on there from anonymous accounts.
Join us on Semi Insider. It's just five bucks a month. See you all again, very soon at Chip Stock Investor.
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