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Micron sales beats expectations as chip supplies remain tight, prices high

Stock Markets15 minutes ago (Jun 30, 2021 04:55PM ET)

(C) Reuters. Micron Technology’s solid-state drive for data center customers is presented at a product launch event in San Francisco, U.S., October 24, 2019. REUTERS/Stephen Nellis/File Photo GLOBAL BUSINESS WEEK AHEAD

By Stephen Nellis

(Reuters) -Micron Technology Inc on Wednesday beat Wall Street estimates for quarterly profit and forecast fourth-quarter revenue above expectations, as tight supplies of memory chips and continued strong demand kept prices high.

The chipmaker forecast current-quarter revenue of $8.2 billion, plus or minus $200 million, while analysts on average were expecting $7.87 billion, according to IBES data from Refinitiv.

Micron (NASDAQ:MU) makes NAND memory chips that serve the data storage market and DRAM memory chips that are used in data centers, smartphones and other computing devices. It has benefited from the pandemic-induced global shift toward remote work as demand for laptops and other electronic devices soared.

In prepared remarks, Micron Chief Executive Sanjay Mehrotra said the company expects industry-wide supplies of both kinds of chips to remain tight until the end of next year, keeping prices high.

“We believe Micron’s strong financial performance will continue cross-cycle, and over the long term, our revenue growth will outperform the broader semiconductor industry,” Mehrotra said.

Shares rose 0.6% in after-hours trading.

The company’s revenue for the third quarter ended June 3 rose 36% to $7.42 billion, beating estimates of $7.24 billion, according to IBES data from Refinitiv.

Excluding items, the company earned $1.88 per share in the quarter, above estimates of $1.72.

The company also said it will sell a plant in Lehi, Utah, to Texas Instruments (NASDAQ:TXN) Inc. Micron said it expects to get about $1.5 billion for the plant, $900 million of which will be in cash and $600 million of which will be in the value of tools it can either sell to outsiders or move to its other factories. Micron had said it would sell the Utah facility, which it shared with Intel Corp (NASDAQ:INTC) under a joint venture formed nearly a decade ago, as part of a broader technology strategy shift https://www.reuters.com/article/us-micron-tech-strategy/micron-to-put-utah-chip-factory-up-for-sale-as-it-shifts-strategy-idUSKBN2B82WO.

Micron also said that its capital expenditures for fiscal 2021 would rise above $9.5 billion, partly driven by pre-payments as it starts to acquire extreme ultraviolet lithography (EUV) machines from Dutch maker ASML Holding (NASDAQ:ASML) NV . The machines are necessary for making the most cutting-edge chips but can cost more than $100 million each.

Micron sales beats expectations as chip supplies remain tight, prices high

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