Micron Technology stock (NASDAQ:MU) was up 4.5% on Tuesday, while the Nasdaq Composite was down 1.1%, and the iShares Semiconductor ETF (SOXX) was down 2.8%.
Investors seem to be buying Micron and selling other semiconductor companies as they attempt to sift out the winners and losers in the administration’s new restrictions, which seek to restrict shipments of sophisticated semiconductors and semiconductor equipment to China.
Market Analysis of Micron Stock
Although there had previously been some limits on chip and equipment shipments to China, last Friday’s new guidelines imposed the most stringent restrictions. Every semiconductor equipment sale to foundries inside China will henceforth be regulated, with a probability of refusal unless the government grants a special license.
Most significantly for Micron stock (NASDAQ:MU), the new limits not only impact equipment sales for sophisticated logic and artificial intelligence chips, as we witnessed with Nvidia’s (NVDA) August restrictions, but they also affect advanced Chinese memory businesses. Yangtze Memory Technologies Co. (YMTC), which is now creating sophisticated NAND flash, is the most prominent of the upstart Chinese memory names.
Additionally, equipment sales to non-Chinese businesses operating fabs (microchip fabrication units) in China, such as South Korean memory manufacturer and Micron rival SK Hynix, would be limited unless a license is secured.
I believe equipment sales to non-Chinese fabs inside China will ultimately result in a license. Still, since Micron does not have any leading-edge memory fabs in China, it stands to profit as rivals are possibly blocked off from leading-edge equipment.
Notably, it has been reported that Apple (AAPL) recently attempted to get advanced memory chips from YMTC, most likely for iPhone and/or Mac sales in China; nevertheless, that plan was criticized by American politicians earlier this summer.
So, what now?
It’s unknown how much of its competitors are excluded from cutting-edge, American-made semi-cap equipment, but Micron shareholders will be pleased with today’s victory. Micron stock (NASDAQ:MU)has had a difficult year, with the stock down 42% on the due to a streak of unsuccessful earnings, year announcements.
On the plus side, that’s a little better than several other well-known brands in the semiconductor industry. With the CHIPS Act enacted this summer and Micron being the only manufacturer of dynamic random-access memory (DRAM) chips and one of two manufacturers of NAND flash in the United States, these new rules of the road might help Micron significantly in the future.
We are now in a severe memory downturn, as indicated by Micron’s significant decline in sales and profits prediction in its September 29 results report. However, once the next upcycle begins, Micron will likely be in a better competitive position.
Featured Image – Megapixl © Alexraths
Author Okoro Chinedu 
