Key Takeaways
- Micron fell 13% on a phone chipmaker’s memory-cost warning and a reported pause at a $4.5 billion Taiwan plant.
- Phone and PC makers pay Micron the most, and Apple just guided margins lower on memory.
- The paused plant wasn’t producing yet, and ASML still expects tool demand to outrun its supply.
- Micron is already priced for a bust, so its December report needs to show customers still paying.
Micron Technology (MU) fell 13% this morning as the chip selloff rolled into a second day.
After Wednesday’s close, a top phone chipmaker warned that rising memory costs are weighing on its margins and phone sales, a warning for big memory buyers like Apple (AAPL) too. Then Bloomberg reported that Micron had paused a $4.5 billion Taiwan plant, the kind of project toolmakers like ASML (ASML) count on.
What exactly happened
The chipmaker said in its fourth-quarter release that it’s raising prices to cover rising costs, memory among them. Its handset chip sales still fell 26% in the quarter.
The Taoyuan plant is reportedly on hold over a labor dispute: workers, who voted to strike in October, want 15% of Micron’s global operating profit.
Bloom fell despite a 900 MW deal with NTT DATA this morning, as Democrats’ midterm wins stoked fears of a slower AI build-out.
TIKR tracks 49 analysts on Micron. How many say “Buy”?
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Phone makers pay Micron the most
Before this week, analysts expected Micron’s EPS to more than double in fiscal 2027:
That depends on phone and PC makers, who pay the most. Micron’s phone and PC unit earned an 80% operating margin in fiscal 2026, up from 17%.
Apple can absorb that. But on Apple’s Nov. 2 call, CFO Kevan Parekh guided gross margin to 45%-46% this quarter, from 47.9%, mostly on memory. So how long can phone makers without Apple’s margins keep paying?
The Taiwan plant is a later problem
The paused plant wasn’t producing yet.
ASML dropped 8%, and Applied Materials (AMAT) fell 11% with no news of its own. But ASML said in its Oct. 14 results release that its planned supply for 2027 and 2028 won’t fully meet demand, and one paused fab won’t change that unless other memory makers follow.
Already priced for a bust
Micron traded at 4.7x forward earnings at Wednesday’s close, below any quarter-end reading in five years. Today’s drop takes it lower.
The warning from Qualcomm (QCOM) matters more than the Taiwan headline, and at this price Micron just needs its December report to show phone and PC customers still paying. If they pull back hard, fiscal 2027 estimates fall, and the stock is less cheap than it looks.
So what is Micron stock actually worth?
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