Micron estimates that NAND and DRAM prices will remain high-end next year

Micron, the largest memory chip maker in the United States, announced on Wednesday (June 30) that its financial forecast for the quarter was higher than market expectations, indicating strong demand for data storage semiconductors for computers and mobile phones. The sale of the Utah wafer plant to Texas Instruments previously announced by Micron will bring in $900 million in cash for the company.
 
Micron estimates this quarter (June to August) revenue of about 8.2 billion US dollars, higher than analysts' expectations of 7.85 billion US dollars; excluding specific items adjusted earnings per share of about 2.3 US dollars, analysts expected 2.17 US dollars.
 
Micron said that the memory chip factory sold to Texas Instruments is located in Lehi, Utah, and is a joint venture with Intel. The sales revenue of 900 million U.S. dollars in cash, and about 600 million U.S. dollars worth of assets, including production equipment, will be moved to other Micron factories or sold to other buyers.
 
Micron CEO Sanjay Mehrotra said that demand for all the company's products is quite strong. However, the supply of the Malaysian factory has been disrupted by the lockdown measures related to the new crown virus epidemic. In addition, due to the shortage of other types of chips for industrial customers such as automobile factories and computer factories, production capacity is limited, various circumstances have restricted memory orders.
 
Merota said that the prices of Micron’s two main products continue to rise, but the company’s plans to reduce the risk of future supply chain disruption have pushed up costs. He emphasized that the tight supply of NAND and DRAM memory chips for the entire industry will continue until next year, keeping prices at a high level.
 
Micron said that this quarter's gross profit margin will be around 1 percentage point at 46%, which is in line with market expectations of 46%.
 
After the financial report was announced, Micron's stock price fell 1.7% in after-hours trading hours. During normal trading hours, it closed up 2.5% to $84.98. Micron’s stock price has risen only 13% this year, while the Philadelphia Semiconductor Index has risen by 20%. Some investors worry that the large orders for laptops and work from home during the epidemic will be reduced as people return to the office. In addition, the inventory of parts of smart phone manufacturers in mainland China is also increasing.