Micron Technology exceeded Wall Street’s year-over-year revenue estimates by 30 percent in the fiscal second quarter. During the period, the firm did well because it capitalized on strong demand for its DRAM and NAND products.
The chipmaker anticipates continued growth despite multiple challenges, including the global semiconductor shortage.
Micron’s FQ2 2021 Financial Performance
In the three months ending March 4, Micron made $6.23 billion in sales with adjusted net income of $1.12 billion or 0.93 cents per share. Compared to FQ1, the manufacturer improved its revenue by 8 percent and its net income by 25.75 percent. It also handily beat the guidance it offered back in January.
CEO Sanjay Mehrotra said the corporation performed better than expected because of robust interest in several of its target end-markets. He noted the firm established new gross income records for its automotive and mobile chip sales. The chief executive further commented that it successfully capitalized on the spike in demand for artificial intelligence and 5G-related memory products in the wake of the coronavirus pandemic.
In addition, Micron reaffirmed its position as a leading-edge memory component provider last quarter.
It brought its 1-alpha DRAM node, which boasts a 40 percent generational improvement in transistor density, into mass production. That innovation proved the manufacturer could launch competitive offerings by optimizing its technology instead of transitioning to new methodologies like extreme ultraviolet lithography.
Mehrotra explained the chipmaker managed to keep its output consistent in FQ2 despite recent headwinds. Last December, the firm’s Taiwan-based fabs dealt with a 6.7 magnitude earthquake and a subsequent power outage. However, its past infrastructural investments mitigated the impact those events have on its operations.
Micron Sees Growth in 2021 Despite Chip Shortage
Micron anticipates earning $6.9 billion to $7.3 billion, with adjusted earnings per share of $1.55 to $1.69. If the corporation hits the midpoint of its forecast, it will top its FQ3 2020 sales and income by 30.75 and 95.1 percent, respectively.
The firm has a positive outlook for the present period because it projects continued strong demand for its memory components.
Even so, the company expects the semiconductor market will remain underserved for the rest of 2021 because of the global chip crisis. CFO Dave Zinsner described the organization’s inventory as “very lean,” especially in DRAM. That said, he argued the firm is in a strong position and believes its 2H21 financial performance will be “stellar.”
Micron is confident that the drought Taiwan is grappling with will not affect its local facilities. Its factories in Taoyuan and Taichung had the water supply cut by the island’s government. However, the organization initiated conservation measures and secured alternate water supplies in response.
The Boise, Idaho-based company also intends to spend $9 billion this year to ensure its long-term bit supply remains consistent.
Mehrotra said that the memory/storage segment represents 30 percent of semiconductor sales, up 10 percent from the early 2000s. He reasoned the change occurred because DRAM and NAND played a key role in enabling global technological advancement. He indicated that the chipmaker’s trailblazing R&D efforts had laid a foundation for its success in the future data economy.
Provided that it can overcome its challenges in Taiwan, Micron should continue growing through year’s end and beyond.