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If Micron’s numbers are any indication, the chip industry should have a strong year. Buyers of crisps: less.
Micron on Wednesday reported strong results for its fiscal second quarter ended March 4. Revenue jumped 30% year-over-year to $ 6.2 billion, according to an advance announcement earlier this month. But the company also forecast a 31% jump to $ 7.1 billion for the current quarter ending in May. Analysts expected just under $ 6.8 billion for the quarter, according to FactSet. Micron shares rose about 2% after hours.
Almost three-quarters of Micron’s revenue comes from DRAM. Revenue in this segment jumped 44% year-over-year to about $ 4.4 billion. But CEO Sanjay Mehrotra also noted in the company’s call on Wednesday that the DRAM segment is “facing severe under-supply” as demand has exploded. Memory is also affected by production shortages elsewhere in the semiconductor space, as DRAM is a key component for products such as mainframe and graphics processors. Mr. Mehrotra said the demand for memory “would have been even greater” without these shortages. Micron expects the DRAM market to remain tight throughout the year.
Production shortages plagued the chip market and were made worse by disasters such as the Texas freeze and a fire at an auto chip factory in Japan. Micron has not been relieved of these concerns. Mehrotra noted that a drought in Taiwan has limited the water supply to one of its chip manufacturing facilities there, although it has not yet affected production.
It’s always a bad sign for battered chip customers waiting for the shortage to end. Ford said Wednesday it was slowing production at several US factories due to lack of necessary chips. Other automakers are feeling similar tensions. President Biden’s infrastructure plan, announced Wednesday, includes a $ 50 billion proposal to boost domestic chip production – more good news for U.S. chipmakers like Micron. But funding is uncertain and will not alleviate the situation in the short term anyway. Meanwhile, Micron will have to settle for selling all the chips it can make.
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