MUFriday, 16 Oct 2026
Taichung AATT2 opens, 2027 HBM capacity sold out, largest-ever $35.16 billion buyback authorisation, custom HBM4E for NVIDIA…
Demand visibility now extends from 2026 into 2027, locked in by long-term contracts rather than spot speculation. Management has backed the durability of the cycle with the largest buyback authorisation in its history ($35.16 billion, 16.3 times the previous $2.16 billion).
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With NVIDIA, Micron has moved from selling standard parts to co-designing the base die, which deepens the moat and raises switching costs. All three makers shifting capital towards HBM4E at the same time deepens the HBM4 shortage, which means higher prices and volumes for Micron, whose long-term contracts are already locked in. Price, volume and time all point the same way, positively. The core risks are the squeeze from overall capex and a turning point in the macro AI capex cycle.
Key evidence
- On 15 Oct Micron's second advanced packaging and test plant in Taiwan, AATT2 (Houli, Taichung), formally opened, with Taiwan's president Lai Ching-te attending. The new plant focuses on HBM packaging capacity and went from groundbreaking to volume production in about a year.
- The new line uses the 1γ (1-gamma) process to make DRAM for HBM4. Japan's Ministry of Economy, Trade and Industry (METI) is subsidising about $3.4 billion of it.
- The company stated explicitly that all of its 2027 HBM capacity is sold out (locked in by long-term contracts), locking in another year ahead after yesterday's 2026 sell-out.
- On 13 Oct Micron raised its share buyback authorisation from the remaining $2.16 billion straight to $35.16 billion, effective 9 Dec. By comparison, cumulative buybacks since 2019 total less than $8 billion. FY4Q revenue rose 379% YoY.
- Micron announced the industry's first custom HBM4E, developed for NVIDIA's next-generation GPUs (the Rubin series). It works with NVIDIA's NVHBM scheme, which pushes the memory controller down into the HBM base die. Volume production is expected in calendar 2027.
- HBM4 contract prices are up about 117% cumulatively from the starting point. SK Hynix, Samsung and Micron are all putting capital first into HBM4E development rather than simply adding HBM4 capacity, so HBM4 prices are expected to stay high until at least the first half of 2027.
- AMD is scrambling for supply. A JPMorgan model puts the global memory supply gap at about 20%. The HBM market is worth about $64 billion in 2026, rising to about $160 billion in 2028.
Catalysts to watch
- The buyback authorisation takes effect on 9 Dec: first disclosure of the actual quarterly pace of repurchases
- AATT2 ramp progress and yield disclosure (whether the in-house TC bonding capacity materialises)
- Alignment of NVIDIA's Rubin series launch timeline with the 2027 HBM4E volume production schedule
- Cross-checking of the gross margin and pricing basis for the 2027 sell-out in the next quarterly report
- Whether SK Hynix and Samsung capex guidance also shifts to HBM4E, which would confirm how long the HBM4 shortage lasts
- Details of the terms of Japan's $3.4 billion METI subsidy (whether tied to localisation rates or technology transfer)
Risks
- A buyback authorisation is not immediate execution. The higher ceiling sets the tone, but the pace of execution could be squeezed by the next round of capex
- Deep tie-in with NVIDIA on the base die means higher customer concentration, and a delay to NVIDIA's GPU roadmap or a switch to other suppliers would amplify the impact
- If the three makers' capital moving in the same direction towards HBM4E overshoots demand, supply and demand could reverse after 2028
- Taiwan's geopolitical risk is a long-term drag on the continuity of AATT2 capacity
- If the AI capex cycle turns before the first half of 2027, pricing is locked in by long-term contracts but incremental orders would slow
- Outside the macro semiconductor cycle, DRAM demand from PCs, phones and traditional servers is still weak, so HBM is the one leg carrying the valuation
Sources (6)
- Micron press release and company statement on the AATT2 opening in Taichung, 15 Oct
- METI subsidy disclosure (related reports, 15 Oct)
- Micron buyback authorisation announcement, 13 Oct ($35.16 billion, effective 9 Dec)
- NVIDIA NVHBM architecture note and Micron announcement of the custom HBM4E base die (around 15 Oct)
- Industry data provider's HBM4 contract price index (up 117% cumulatively)
- JPMorgan model: global memory supply gap of about 20%, HBM market from $64 billion to $160 billion
A brief is a lead for our research, not a verified conclusion or advice.