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Micron smashes forecasted estimates as memory chip market booms - PC Retail

Micron smashes forecasted estimates as memory chip market booms

Beating second-quarter profit estimates, shares in the company are current trading 9.4 per cent higher year-on-year
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The global memory chip market continues to be big business. Latest figures released by Micron Technology show that investment in the sector is growing at a rapid pace. Beating second-quarter profit estimates, shares in the company are current trading 9.4 per cent higher year-on-year. As a result, Micron adjusted its forecasted profit of $1.43-$1.57 per share for the current quarter, well above the average analysts' estimate of 90 cents, according to Thomson Reuters.

And it is a sign of the market as a whole, with many analysts claiming the sector is on the brink of an ‘ultra-super-cycle’ as more efficient chips, combined with growing demand – mainly for storage, smartphones and AI – creates a supply bottleneck. Idaho-based company The Boise also said it expected annual revenue of $5.2 billion-$5.6 billion, handily beating estimates of $4.72 billion. The developing markets of autonomous driving and the Internet of Things is also driving up demand and only shows signs of getting bigger.

Micron CEO Mark Durcan said the company is benefiting from several markets doing well simultaneously. "We saw continued gains in client DRAM pricing, but also benefited from increases in mobile, cloud, and enterprise pricing as well," he said.

Accounting for 64 per cent of Micron’s revenue, average selling prices of DRAM chips jumped 21 per cent in the second quarter, following a 5 per cent rise in the first quarter. At the same time, the firm saw an 18 per cent rise in the sales of NAND chips used in storage devices and smartphones.

And on the back of its success, Micron is looking up acquiring new assets. After closing a $3.2 billion deal of Taiwanese chip company Inotera four months ago, the US giant is said to be eyeing up a bid for cash-strapped Toshiba. There are conflicting reports on this, with Toshiba said to be in talks with a Japanese bank and a consortium of state-funded businesses

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