Micron Technology sees huge progress for semiconductors in 5G and electric powered autos as earth economies get well from the pandemic, CEO Sanjay Mehrotra informed CNBC on Thursday.
“The markets currently are extra diversified than at any time. Automotive, electric motor vehicles necessitating extra memory and storage — actually turning into details centers on wheels in the potential — and unquestionably smartphones, knowledge centers, gaming, industrial applications” are all contributing to enhanced have to have for chips, Mehrotra claimed on “TechCheck.” “We really see a more healthy and extra sturdy need setting than ever.”
Micron — which helps make memory chips utilized for knowledge storage, smartphones and a variety of other computing devices — described far better-than-expected quarterly product sales and profit on Wednesday. Its fourth-quarter revenue steerage also topped analyst projections.
The chipmaker forecast fourth-quarter earnings of $8.2 billion, furthermore or minus $200 million, when analysts on common were expecting $7.87 billion, according to IBES info from Refinitiv.
In its fiscal third quarter, Micron’s earnings jumped 36% to $7.42 billion, when Wall Avenue had been searching for $7.24 billion, in accordance to Refinitiv. Per-share earnings of $1.88, excluding items, defeat forecasts of $1.72.
The pandemic has resulted in a “digital transformation acceleration,” Mehrotra said, and a pronounced shortage of semiconductors that is rippled across the global economy. On Wednesday, for example, Ford Motor introduced one more spherical of manufacturing delays stemming from the chip crunch.
Having said that, larger charges because of to the provide squeezes and the Covid-period shift to remote perform have assisted Micron.
Heading ahead, Mehrotra expects even more tailwinds for the corporation sparked by technological shifts in areas these as wi-fi networks. He said 5G technology, particularly in smartphones, artificial intelligence, clever edge and wise consumer units, have been important resources for demand from customers progress because they all require a lot more facts memory and storage.
Inspite of the optimistic outlook, Mehrotra said the business is currently being “really prudent” in its strategy to fabrication vegetation and potential. “We want to grow our source in line with the long-time period demand from customers traits,” the CEO stated.
But at the minute, he reported, Micron inventories are “running incredibly lean,” with the firm expecting market shortages long lasting through the end of this year and into 2022. “The shortages, as they get alleviated, will proceed to open up up pent-up demand, as perfectly,” he said.
Shares of Micron closed down 5.7% on Thursday to $80.11 apiece. The stock is up extra than 6% yr to date.
— Reuters contributed to this report.