Micron Technology Inc warned that it would need to spend heavily on production to meet burgeoning demand, overshadowing an upbeat forecast from the largest US maker of computer memory chips.
Capital spending would exceed US$25 billion this fiscal year, which runs through August, the company said as part of its quarterly report on Wednesday. Analysts had estimated US$22.4 billion.
Micron added that next year’s expenditures would increase more than US$10 billion from the prior year.
Photo: Bloomberg
“We project our fiscal 2027 capex to step up meaningfully,” chief executive officer Sanjay Mehrotra said during a conference call.
The heavy spending reflects the cost of keeping up with an insatiable appetite for Micron’s memory chips, especially high-bandwidth components used in artificial intelligence (AI) computing.
Fiscal third-quarter revenue would be approximately US$33.5 billion, the Idaho-based company said.
Analysts estimated US$23.7 billion on average for the period. Excluding some items, profit would be about US$19.15 a share, compared with a projection of US$11.29.
Memory prices have been soaring because of shortages fueled by AI computing demand. High-bandwidth memory is critical to the data transfer needed for training and running AI models. That has led memory makers to allocate more production to these higher-margin orders, hurting supply of other types of memory and causing price spikes.
Micron shares had risen 62 percent this year heading into the report, making it the best-performing stock on the closely watched Philadelphia Stock Exchange Semiconductor Index.
For the fiscal second quarter, which ended on Feb. 26, sales nearly tripled to US$23.9 billion. Earnings climbed to US$12.20 per share. Analysts had estimated US$19.7 billion in revenue and US$9 per share in profit on average.
The company has benefited from an unprecedented data center build-out. Their market is dominated by just three providers — Micron, Samsung Electronics Co and SK Hynix Inc — and demand is expected to stay strong for years to come.
Memory shortages have been good for Micron and its peers, but hard on the broader technology industry and consumers. Supply constraints have raised prices and lowered the number of smartphones and computers slated to ship this year.
HP Inc last month said that the company has seen memory prices roughly double this quarter from the previous period.
The global shortage is likely to persist for another four to five years because of endemic constraints in semiconductor production, SK Group chairman Chey Tae-won said this week.
In the AI market, Micron is working to ramp up production of new high-bandwidth memory, or HBM4. A big question is how much Nvidia Corp would rely on Micron for that component.
Any decision by Nvidia to limit its use of Micron for the new Vera Rubin line — and instead favor rival products — would be a significant blow.
Nvidia is the dominant maker of AI accelerators, the main processors used to power AI. Memory components from Micron and its competitors assist those chips in holding and managing data.
Last month, Micron shares surged after chief financial officer Mark Murphy assured investors that the company is producing HBM4 in high volumes.
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
RSS