In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Micron Technology (NASDAQ:MU) against its key competitors in the Semiconductors & Semiconductor Equipment industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
Micron Technology Background
Micron is one of the largest semiconductor companies in the world, specializing in memory and storage chips. Its primary revenue stream comes from dynamic random access memory, or DRAM, and it also has minority exposure to not-and or NAND, flash chips. Micron serves a global customer base, selling chips into data centers, mobile phones, consumer electronics, and industrial and automotive applications. The firm is vertically integrated.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Micron Technology Inc | 32.28 | 6.50 | 9.06 | 9.28% | $8.35 | $7.65 | 56.65% |
| NVIDIA Corp | 46.81 | 38.66 | 24.84 | 29.14% | $38.75 | $41.85 | 62.49% |
| Taiwan Semiconductor Manufacturing Co Ltd | 33.14 | 10.42 | 14.35 | 9.44% | $691.11 | $588.54 | 30.31% |
| Broadcom Inc | 72.01 | 20.03 | 26.09 | 11.02% | $9.86 | $12.25 | 28.18% |
| Advanced Micro Devices Inc | 109.96 | 5.62 | 10.71 | 2.06% | $2.11 | $4.78 | 35.59% |
| Intel Corp | 710.50 | 1.91 | 3.51 | 3.98% | $7.85 | $5.22 | 2.78% |
| Qualcomm Inc | 35.97 | 9.10 | 4.50 | -12.88% | $3.51 | $6.24 | 10.03% |
| Texas Instruments Inc | 33.83 | 10.15 | 9.84 | 8.21% | $2.24 | $2.72 | 14.24% |
| Analog Devices Inc | 64.23 | 4.24 | 13.20 | 2.32% | $1.47 | $1.94 | 25.91% |
| ARM Holdings PLC | 148.31 | 16.57 | 27.95 | 3.3% | $0.22 | $1.11 | 34.48% |
| Marvell Technology Inc | 29.80 | 5.11 | 9.44 | 13.84% | $2.58 | $1.07 | 36.83% |
| NXP Semiconductors NV | 29.58 | 6 | 5.06 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 24.60 | 12.88 | 17.35 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 35.83 | 3.82 | 1.95 | 3.56% | $32.4 | $28.88 | 5.29% |
| First Solar Inc | 18.50 | 2.87 | 5.13 | 5.19% | $0.61 | $0.61 | 79.67% |
| ON Semiconductor Corp | 84.78 | 3.15 | 4.18 | 3.22% | $0.44 | $0.59 | -11.98% |
| STMicroelectronics NV | 49.79 | 1.44 | 2.28 | 1.33% | $0.31 | $1.06 | -1.97% |
| Credo Technology Group Holding Ltd | 121.55 | 19.80 | 33.83 | 7.99% | $0.09 | $0.18 | 272.08% |
| United Microelectronics Corp | 16.66 | 1.96 | 2.95 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 70.65 | 4.83 | 9.15 | 1.9% | $0.13 | $0.09 | 6.79% |
| Lattice Semiconductor Corp | 415.10 | 16.08 | 23.18 | 0.4% | $0.01 | $0.09 | 4.92% |
| Rambus Inc | 43.64 | 7.66 | 14.69 | 3.84% | $0.08 | $0.14 | 22.68% |
| Average | 104.54 | 9.63 | 12.58 | 5.41% | $39.29 | $34.15 | 32.03% |
Through an analysis of Micron Technology, we can infer the following trends:
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At 32.28, the stock's Price to Earnings ratio is 0.31x less than the industry average, suggesting favorable growth potential.
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Considering a Price to Book ratio of 6.5, which is well below the industry average by 0.67x, the stock may be undervalued based on its book value compared to its peers.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 9.06, which is 0.72x the industry average.
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The company has a higher Return on Equity (ROE) of 9.28%, which is 3.87% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $8.35 Billion, which is 0.21x below the industry average, potentially indicating lower profitability or financial challenges.
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The company has lower gross profit of $7.65 Billion, which indicates 0.22x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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The company's revenue growth of 56.65% is notably higher compared to the industry average of 32.03%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By evaluating Micron Technology against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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Among its top 4 peers, Micron Technology has a stronger financial position with a lower debt-to-equity ratio of 0.21.
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This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For Micron Technology in the Semiconductors & Semiconductor Equipment industry, the PE, PB, and PS ratios are low compared to peers, indicating potential undervaluation. On the other hand, the high ROE and revenue growth suggest strong performance relative to industry standards. However, the low EBITDA and gross profit levels may require further investigation to understand the company's operational efficiency.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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