$Micron Technology(MU)$ I really hate to say it, but “this time is different” and I expect MU to have a super cycle this time around. Why? As you know, I always look at memories as a commodity and even HBM is no different. As a commodity, the key driver for price, and hence gross margin and operating margin is supply/demand balance. Because of the 3-1 trade in HBM vs DDR, the industry abruptly transitioned from over supply to severe under supply in one year while HBM demand continues to ramp rapidly and DDR demand is recovering. You add to this supply demand imbalance by WFE capex discipline as the suppliers are forced to invest in packaging driven again by HBM requirements. So we are in the beginning of a perfect storm of severe supply demand imbalance that the industry has not seen as far back as I can remember (and I remember back to the 80’s).

So when will I exit this trade? I will follow my indicators as I always have but I believe this up cycle will be longer than the typical 6 to 8 quarters and it will run much higher from here unless the 3 suppliers start to lose their capex discipline. BTW, they will always lose their capex discipline sooner or later. That is why “the cure for high price is high price”. But I believe if one adheres to the indicators that work well in previously cycles to exit this trade in this cycle, one may likely find one to be exiting too early and leaving money on the table.