Micron Technology Inc, the largest US memorychip maker, reported fiscal second-quarter sales that beat analysts’ estimates as limited supply bolstered prices amid lackluster computer and phone demand.
Net income in the period that ended Feb. 27 was US$731 million, or US$0.61 a share, compared with a loss of US$286 million, or US$0.28, a year earlier, the Boise, Idaho-based company said in a statement on Thursday. Revenue almost doubled to US$4.11 billion. That compares with an average analyst projection for a profit of US$0.59 on sales of US$3.99 billion, according to estimates compiled by Bloomberg.
Micron, which has been seeking to consolidate the industry and make it less susceptible to supply gluts, acquired Japanese rival Elpida Memory Inc last year. While investors have fueled a rally that has more than doubled Micron’s shares in the past year, more evidence is needed on the company’s ability to remain profitable in periods of weak demand, according to Betsy Van Hees, an analyst at Wedbush Securities in San Francisco.
“Contract pricing is starting to come down,” said Van Hees, who recommends buying the stock. “It needs to come down in a fair and orderly fashion, where average selling price declines will not outpace cost declines. That will be the true test of whether the vicious cycle has been broken.”
Even with the return to production of a Chinese plant owned by SK Hynix Inc that was damaged by fire and continuing declines in PC shipments, the market for computing memory remains strong, Micron president Mark Adams said.
“It’s a pretty good time in memory right now,” he said. “This type of performance for the company has been better than we’ve had in the last decade.”
Micron is the largest remaining US manufacturer of DRAM, semiconductors that provide the main memory in PCs. That market has been hit by the first consecutive annual decline in its history as consumers increasingly embrace smartphones and tablets.
The Elpida purchase brought Micron a bigger chunk of the DRAM market to help it gain scale and provide more of a return for its technology investments. It also added production of a type of DRAM used in smartphones, which require less power-hungry chips.
Removing Elpida’s independence also limits the number of companies building new plants and curtails most of the industry’s output to just three companies: Samsung Electronics Co, SK Hynix and Micron.
The US chipmaker also makes NAND flash memory chips, semiconductors that are used for data storage in mobile devices. Those chips are also increasingly making their way into computers in the form of solid-state drives, or SSD.
SSDs need cheaper component prices before they become more widely used,Van Hees said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to