Micron Technology sees immense progress for semiconductors in 5G and electric vehicles as planet economies get well from the pandemic, CEO Sanjay Mehrotra explained to CNBC on Thursday.
“The markets right now are much more diversified than ever. Automotive, electric powered automobiles demanding far more memory and storage — actually getting information facilities on wheels in the upcoming — and certainly smartphones, information facilities, gaming, industrial applications” are all contributing to increased have to have for chips, Mehrotra stated on “TechCheck.” “We actually see a more healthy and additional robust desire environment than at any time.”
Micron — which would make memory chips made use of for details storage, smartphones and a array of other computing equipment — described improved-than-expected quarterly profits and profit on Wednesday. Its fourth-quarter profits assistance also topped analyst projections.
The chipmaker forecast fourth-quarter profits of $8.2 billion, additionally or minus $200 million, when analysts on regular ended up expecting $7.87 billion, according to IBES facts from Refinitiv.
In its fiscal third quarter, Micron’s revenue jumped 36% to $7.42 billion, when Wall Road experienced been on the lookout for $7.24 billion, in accordance to Refinitiv. For each-share earnings of $1.88, excluding things, defeat forecasts of $1.72.
The pandemic has resulted in a “electronic transformation acceleration,” Mehrotra explained, and a pronounced shortage of semiconductors that’s rippled across the global economic climate. On Wednesday, for instance, Ford Motor introduced an additional round of production delays stemming from the chip crunch.
However, greater costs thanks to the provide squeezes and the Covid-period change to remote work have assisted Micron.
Going ahead, Mehrotra expects further more tailwinds for the firm sparked by technological shifts in places this sort of as wi-fi networks. He reported 5G engineering, particularly in smartphones, artificial intelligence, smart edge and wise consumer devices, have been vital sources for demand from customers development considering that they all need more knowledge memory and storage.
Regardless of the optimistic outlook, Mehrotra stated the firm is becoming “very prudent” in its technique to fabrication vegetation and capacity. “We want to improve our offer in line with the prolonged-term demand from customers developments,” the CEO reported.
But at the moment, he explained, Micron inventories are “managing quite lean,” with the enterprise expecting sector shortages lasting as a result of the conclusion of this year and into 2022. “The shortages, as they get alleviated, will go on to open up up pent-up desire, as well,” he claimed.
Shares of Micron shut down 5.7% on Thursday to $80.11 apiece. The inventory is up extra than 6% year to day.
— Reuters contributed to this report.