MICRON Technology, the largest US maker of computer memory chips, surged in late trading after giving surprisingly strong sales and profit forecasts, helped by demand for artificial intelligence (AI) gear.
Fiscal first-quarter revenue will be about US$8.7 billion, the company said on Wednesday (Sep 25). That compares with an average analyst estimate of US$8.3 billion. Profit will be about US$1.74 a share, minus certain items, versus a projection of US$1.52.
Orders for a type of product called high-bandwidth memory have added a lucrative new revenue stream for Micron and other chipmakers. The technology helps develop AI systems by providing more rapid access to massive pools of information.
Demand has been outpacing supply, letting Micron boost prices and secure long-term guaranteed contracts. It’s already sold out of the product for 2024 and 2025, the company said on Wednesday.
The shares rose about 10 per cent in extended trading following the announcement. Micron, which had gained 12 per cent this year, closed at US$95.77 in regular New York trading.
Micron’s revenue gained 93 per cent to US$7.8 billion in the fiscal fourth quarter, which ended Aug 29. Excluding certain items, the profit was US$1.18 per share. On average, analyst had estimated a profit of US$1.12 a share on revenue of US$7.7 billion.
Micron makes dynamic random access memory, or Dram, a type of chip that temporarily holds information and works alongside processors from companies such as Nvidia and Intel. It also makes Nand flash memory – semiconductors that store information in everything ranging from data-centre computers to smartphones.
“Robust AI demand drove a strong ramp of our data centre Dram products,” chief executive officer Sanjay Mehrotra said. “We are entering fiscal 2025 with the best competitive positioning in Micron’s history.”
The company is one of only a handful that have survived the industry’s brutal boom-and-bust cycles over the devices. Those swings in demand have made it difficult to maintain consistent profits, but the company has been emerging from the latest downturn. The chipmaker competes with South Korea’s Samsung Electronics and SK Hynix in the memory market. BLOOMBERG
