After the closing of the US stock market on Wednesday (December 20th), chip giant Micron Technology announced strong revenue expectations, indicating that demand from data centers is helping to offset the slow recovery of the market for personal computers (PCs) and smartphones.
According to specific financial data, in the first quarter of the 2024 fiscal year (September, October, and November this year), Micron achieved a revenue of 4.73 billion US dollars, stronger than the previous quarter's 4.01 billion US dollars and the same period last year's 4.09 billion US dollars; In addition, the loss per share was 0.95, both numbers better than market expectations of $4.54 billion and a loss of $1 per share.
In its business outlook for the second quarter (December this year, January and February next year), Micron expects revenue to be between 5.1 billion and 5.5 billion US dollars, stronger than analysts' expectations of 4.99 billion US dollars; The company also expects the loss per share to narrow to between $0.21 and $0.35, which is also more optimistic than Wall Street's expectation of $0.62.
As of press release, Micron Technology rose more than 7% in intraday trading on Thursday, recovering from yesterday's 4.24% decline. Driven by investor optimism, Micron has risen nearly 70% since the beginning of the year, outperforming the 60% increase in the Philadelphia Semiconductor Index.
The prospects of Micron indicate that the company may have passed the worst period of industry recession and is on the path back to profitability. CEO Sanjay Mehrotra pointed out that in order to support the development of artificial intelligence software, the demand for expensive memory in data centers has become stronger.
With the rise of artificial intelligence big models, high bandwidth memory (HBM) has become the mainstream solution for current graphics processing unit (GPU) storage units. Mehrotra revealed that Micron has sold out all the HBMs that the company can manufacture in 2024.
He also reiterated his previous prediction that 2024 would be a rebound year for the industry, laying the foundation for record breaking performance in 2025. "The opportunities for high income and high profits in the industry are just beginning," he said
In the past two years, due to the decline of the consumer electronics industry, the prices of memory used for smartphones and PCs have plummeted to below production costs. Looking ahead, Micron expects PC sales to grow at a rate of 1% to 6% next year, while smartphones will also experience a moderate increase.
Mehrotra said that although there has not been a particularly noticeable rebound in demand in these areas, customers can at least solve the problem of excess inventory - which helps restore supply-demand balance. But he said that Micron still needs to wait until prices improve before increasing the production of such chips.
Recently, according to South Korean media reports, both Samsung and SK Hynix plan to increase investment in semiconductor equipment in 2024. Samsung Electronics is expected to invest 27 trillion Korean won (approximately 20.78 billion US dollars), a 25% increase from this year; SK Hynix plans to invest 5.3 trillion Korean won (approximately 4.07 billion US dollars), an increase of 100% from this year.
In addition to increasing investment in semiconductor equipment, Samsung Electronics and SK Hynix have also raised their production capacity targets for 2024. Samsung Electronics plans to increase the production of DRAM and NAND flash memory by approximately 24%, while SK Hynix's goal is to restore DRAM production to levels by the end of 2022.