BENGALURU: Memory chipmaker Micron Technology forecast quarterly revenue above market estimates on Wednesday (Dec 20) as memory demand and pricing begins to recover after one of the most significant downturns in years.
The company’s shares rose nearly 5% in extended trading.
Analysts expect demand for flash storage and dynamic random access memory (DRAM) to continue to improve next year. Memory prices, which slumped this year, have improved in recent weeks, which will help the company deliver higher profitability.
Micron forecast revenue of US$5.3 billion (RM24.6 billion), plus or minus US$200 million, for the second quarter, compared with estimates of US$5.03 billion, according to LSEG data.
Businesses have begun to incorporate generative artificial intelligence (AI) into various products and services that has boosted demand for Micron’s high-bandwidth memory chips, which are necessary to train large language models that form the foundation of AI tech.
“Demand for AI servers has been strong as data center infrastructure operators shift budgets from traditional servers to more content-rich AI servers,” Micron CEO Sanjay Mehrotra said.
On an adjusted basis, the company expects a loss of 28 cents per share, plus or minus 7 cents, for the second quarter, compared with estimates of a loss of 62 cents per share.
Micron’s results reflect the beginning of a recovery in the memory market for memory and flash storage.
Rival SK Hynix has supplied AI giant Nvidia. Mehrotra said Micron is in the final stages of qualifying for its HBM3E chips to be used in Nvidia/s next generation Grace Hopper GH200 and H200 platforms.
Earnings of major chipmakers Intel and Advanced Micro Devices offered evidence of a recovery in PC demand gathering pace following a post-pandemic supply glut. – Reuters