Thanks to strong demand for artificial intelligence (AI) devices, Micron Technology (MU.US) reported better-than-expected fourth-quarter results and guidance after the US stock market closed on Wednesday, Eastern Time.
Data shows that in the fourth quarter of fiscal year 2024, which ended on August 29, 2024, Micron Technology's revenue increased by 93% year-on-year to $7.75 billion, better than the market's expected $7.66 billion; earnings per share excluding certain items were $1.18, also better than the market's expected $1.12.
By business segment, Micron Technology's DRAM revenue in the fourth quarter increased by 93% year-on-year to $5.3 billion, accounting for 69% of total revenue; NAND revenue increased by 96% year-on-year to $2.4 billion, accounting for 31% of total revenue.
Micron Technology forecasts that revenue for the first quarter of fiscal year 2025 will reach around $8.7 billion, easily exceeding the market's expected $8.32 billion; earnings per share excluding certain items are expected to be around $1.74, while the market expects $1.52.
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This optimistic outlook is the latest sign that Micron is benefiting from the AI spending boom. High Bandwidth Memory (HBM) orders have added a new source of revenue for the company and other chip manufacturers. The technology helps develop AI systems by providing faster access to large amounts of information.
Demand has consistently exceeded supply, allowing Micron to raise prices and secure long-term contracts. The company said that its products for 2024 and 2025 have already been sold out.
Manish Bhatia, Executive Vice President of Micron, said in an interview that Micron's advantage lies in being the first chip manufacturer capable of reliably mass-producing more advanced memory. He said that as companies compete to enhance their AI software and hardware, using more storage in the process, Micron is in a favorable position.
The chip manufacturer is also shaking off the impact of slowing demand for personal computers and smartphones, the two largest storage markets. Micron said that device shipments are now starting to grow again. Bhatia said that these devices will increasingly be equipped with AI features, which require more storage chips to function properly, benefiting Micron Technology.
It is reported that the DRAM produced by Micron Technology can work with processors from companies such as NVIDIA and Intel. Micron Technology also produces NAND, a type of semiconductor that can store information on various devices from data center computers to smartphones.
Sanjay Mehrotra, CEO of Micron Technology, said in a statement: "Strong AI demand has driven strong growth in our data center DRAM products." "We will enter fiscal year 2025 with the most competitive positioning in Micron's history."Micron Technology is one of the few companies that have survived the brutal boom-and-bust cycles of the equipment industry. Fluctuations in demand have made it difficult to sustain profitability, but the company has emerged from the recent downturn. The chipmaker competes in the memory market with South Korea's Samsung Electronics and SK Hynix.
Micron Technology's stock rose more than 14% after hours. The stock has gained 12% year-to-date.
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