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Micron (MU) shares are holding up well despite a Reuters report that the company plans to exit the server chip business in China following heightened regulatory pressure from Beijing. Investors appear confident that MU can offset the lost sales in China’s data center market through booming demand from U.S. hyperscalers and a rebound in smartphone-related memory demand.

• MU will continue to sell to two Chinese customers with major data center operations outside of mainland China, including Lenovo. It will also maintain sales to automotive and mobile phone customers in China.
• In FY24, MU generated roughly $3.4 bln in revenue from mainland China, representing about 12% of total revenue.
• The exit announcement comes on the heels of MU’s stellar 4Q25 results, reported on September 24, which included a significant EPS beat and upside guidance for 1Q26.
• Growth continues to be fueled by surging demand for HBM (high bandwidth memory) chips, which powered a 214% revenue jump in the Cloud Memory unit last quarter.
• DRAM prices remain elevated due to persistent supply constraints and strong demand, helping push Q4 gross margin up 670 bps to 45.7%.

Briefing.com Analyst Insight:

While the decision to exit China’s server chip business underscores the geopolitical and regulatory challenges that U.S. chipmakers face, MU’s strategic position in AI-related memory solutions gives it a strong offsetting growth engine. The company’s booming HBM sales and strengthening pricing power in DRAM and NAND are likely to cushion any near-term revenue loss tied to China. This move may even streamline operations and reduce risk exposure to unpredictable policy actions. Investors are rightly focusing on MU’s dominant role in the AI-driven memory cycle, which appears to be in its early innings. With expanding margins and a favorable demand backdrop, the stock’s resilience today looks well justified.