Micron jumps after upbeat forecast on strong demand for chips

Micron Technology Inc., the largest U.S. maker of memory chips, jumped in late trading after giving an upbeat forecast for the current quarter, helped by demand from networking, data-center and automotive customers.

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Micron said Monday that sales will be about $7.5 billion in the period ending in February. According to Bloomberg, analysts average estimate of $7.32 billion is higher than the average estimate of $7.32 billion. The company said that the profit will be around $1.95 a share, excluding certain items. Analysts predicted that there would be $1.86.

Micron is benefiting from the use of memory chips in a wider range of products - from cars to home appliances, according to Chief Executive Officer Sanjay Mehrotra. The Boise, Idaho-based company has been less dependent on the personal computer and smartphone market for revenue because of that.

Micron s success pushing into new areas was underscored by strong demand for chips used in data center computers and industrial machinery, according to Mehrotra, who spoke to analysts on a conference call. PC makers are starting to build more machines with more availability of other types of components, which is helping them to get more orders from customers. They had struggled to make enough computers to meet demand because of a shortage of parts.

Micron's fiscal first quarter puts it on course for record annual revenue and healthy profits, Mehrotra predicted.

Today it is not just the data center -- it's all the end markets that are fueling the data economy, the CEO of Micron said in an interview. He predicted that memory and storage will grow faster than the rest of the chip industry, propelled by these new markets. They are even more than that. The company had revenue of $7.69 billion in the three months ended December 2, up 33% from a year earlier. Net income was $2.3 billion, or $2.04 a share.

Micron's shares rallied as much as 7.3% to $88 in extended trading after the report. They had gained 9.1% this year through Monday's close, lagging behind an overall surge in chip-related stocks. The Philadelphia Stock Exchange Semiconductor Index has climbed 34% this year.

Micron is competing with South Korea's Samsung Electronics Co. SK Hynix Inc. and Japan's Kioxia Holdings Corp. in a memory chip market that has consolidated over the past decade. Samsung produces both major types of chips. DRAM chips hold data temporarily, helping processors crunch data. Nand flash memory is used as a permanent storage device in phones and computers.

Producers have tried to be more disciplined about expanding factory output, trying to avoid the industry's famous boom and bust cycles. In 2022, there will be a healthy balance between demand and supply, according to Micron. This fiscal year, the company will spend $11 billion to $12 billion on new plants and equipment.

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