Micron Stock Falls After Report of $4.5 Billion Taiwan Pause

Micron and Sandisk shares fell 14% and 19% respectively on Thursday, with both stocks down over 29% in the past month. Despite strong earnings growth and low forward P/E ratios (4.8x for Micron, 4.9x for Sandisk), investor sentiment has shifted due to political developments and potential slowdowns in data center construction.

Micron Technology (MU) shares fell 11.8% to $701.36 on November 5, raising questions about AI memory demand supporting its $61.5B revenue guidance. The company's fiscal Q1 outlook relies heavily on Cloud Memory and Core Data Center segments, which generated $34.285B in the prior quarter. Investors are watching for sustained demand and margin stability in upcoming results.

Asian semiconductor stocks fell sharply after Qualcomm (QCOM) missed revenue expectations and Arm (ARM) reported lower-than-expected royalty revenue. Samsung (005930.KS) and SK Hynix (000660.KS) led declines. Chinese chipmakers rose due to government support. U.S. chip stocks also dropped, with Micron (MU), Intel (INTC), AMD (AMD), and Nvidia (NVDA) falling.

Micron (MU) and Sandisk (SNDK) stocks fell 14% and 19% respectively, with one-month drops of 36% and 29%. Both trade at forward P/E ratios of around 4.8-4.9, despite strong demand and expected earnings growth. The sell-off is attributed to concerns over slowed data center construction due to political changes, potentially impacting long-term earnings.

Micron Technology (MU) shares dropped 5% after a labor dispute halted construction of a $3B-$4.5B memory chip facility in Taiwan, potentially delaying its 2028 operations. The delay impacts Micron's competition with Samsung, SK Hynix (SKHY), and CXMT in the memory market, particularly for AI-related HBM chips. The dispute centers on employee compensation, with negotiations ongoing. Taiwan's government is assisting with the investment plans.

Micron Technology (MU) has halted construction of a $4.5B memory-chip plant in Taiwan due to a labor dispute over compensation. The project, Fab 11E, was expected to start production in 2028. Taiwan is crucial to Micron's supply chain, accounting for 60% of its global DRAM output. Current production remains unaffected, but delays could impact future supply and pricing.