Read for 4 minutes (Reuters) – Micron Technology Inc exceeded Wall Street projections for quarterly profit on Wednesday and anticipated fourth-quarter sales above expectations, as memory chip supply remained tight and demand remained robust. Micron Technology’s solid-state drive for data center clients is unveiled at a product launch event on October 24, 2019 in San Francisco, California. FILE PHOTO: REUTERS/Stephen Nellis A HEAD START ON THE GLOBAL BUSINESS WEEK According to IBES statistics from Refinitiv, the chipmaker anticipated current-quarter revenue of $8.2 billion, plus or minus $200 million, while analysts on average expected $7.87 billion. Micron manufactures NAND memory chips for data storage and DRAM memory chips for data centers, smartphones, and other computing devices. As demand for laptops and other electronic devices rose as a result of the pandemic-induced global shift toward remote work, it profited. Micron Chief Executive Sanjay Mehrotra said in prepared remarks that the company anticipates industry-wide supply of both types of chips to remain constrained through the end of next year, resulting in high prices. “We anticipate Micron’s outstanding financial performance will persist across cycles, and our revenue growth will outpace the larger semiconductor industry in the long run,” added Mehrotra. After-hours trading saw shares rise 0.6 percent. According to IBES statistics from Refinitiv, the company’s revenue for the third quarter ended June 3 increased 36 percent to $7.42 billion, exceeding predictions of $7.24 billion. The company earned $1.88 per share in the quarter, beating analysts’ expectations of $1.72. Texas Instruments Inc. will buy a factory in Lehi, Utah, according to the firm. Micron intends to receive $1.5 billion for the plant, with $900 million in cash and $600 million in the value of tools that can be sold to third parties or moved to other Micron operations. Micron has previously stated that it will sell the Utah facility, which it shared with Intel Corp, as part of a broader technology strategy shift in the United States. The company took a $435 million impairment charge since the facility’s $900 million in cash was less than its book value, but Chief Business Officer Sumit Sadana told Reuters in an interview that the factory was on course to lose nearly $500 million this year due to underutilization. Micron also said that its capital expenditures for fiscal 2021 would exceed $9.5 billion, owing to pre-payments as it begins to acquire extreme ultraviolet lithography (EUV) machines from ASML Holding NV of the Netherlands. The machines are required for the production of the most cutting-edge chips, but each one can cost more than $100 million. Officials said the corporation used cheaper chipmaker processes for as long as it could, but will begin employing EUV machines in production in 2024. “In the production process, EUV is a very large and vital instrument. And EUV is a tool that requires a considerable lead time from ASML to manufacture. The orders must be placed as soon as possible “Sadana remarked. Akanksha Rana and Niket Nishant reported from Bengaluru, and Stephen Nellis from San Francisco; Devika Syamnath, Lisa Shumaker, and Sonya Hepinstall edited./n
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