After the U.S. stock market closed on Wednesday (December 20), chip giant Micron Technology announced strong revenue expectations, indicating that demand for data centers is helping to make up for the slow recovery of personal computers (PCs) and smartphones. Specific data from the financial report show that in the first quarter of fiscal year 2024 (September, October and November this year), Micron achieved revenue of US$4.73 billion, which was stronger than the US$4.01 billion in the previous quarter and the US$4.09 billion in the same period last year; in addition, the loss per share was 0.95, both figures were better than market expectations of US$4.54 billion and a loss per share of US$1.
In its business outlook for the second fiscal quarter (December this year, January and February next year), Micron expects revenue to be between US$5.1 billion and US$5.5 billion, stronger than analysts' expectations of US$4.99 billion; the company also expects losses per share to narrow to between US$0.21 and US$0.35, which is also more optimistic than Wall Street's US$0.62 forecast.
As of press time, Micron Technology rose more than 7% on Thursday, recovering from yesterday's 4.24% decline. Driven by investor optimism, Micron has risen nearly 70% so far this year, outperforming the 60% increase of the Philadelphia Semiconductor Index.
Micron's outlook suggests the company may have weathered the worst of the industry-wide recession and is on its way back to profitability. CEO Sanjay Mehrotra noted that demand for expensive memory in data centers has become strong to support the development of artificial intelligence software.
With the rise of large artificial intelligence models, high-bandwidth memory (HBM) has become the mainstream solution for current graphics processing unit (GPU) storage units. Mehrotra revealed that Micron has sold out all the HBM the company can make in 2024.
He also reiterated his previous prediction that 2024 will be a rebound year for the industry, laying the foundation for record performance in 2025. "The opportunities for high revenue and high profits in the industry have only just begun."
In the past two years, due to the decline of the consumer electronics industry, the price of memory used in smartphones and PCs once plummeted to less than the production cost level. Looking forward, Micron expects PC sales to grow at a rate of 1% to 6% next year, while smartphones will also see modest growth.
Mehrotra said that while demand in these areas has not picked up particularly significantly, customers can at least address the problem of excess inventory - which can help restore the balance between supply and demand. But he said Micron still needs to wait until prices improve before increasing production of such chips.
Today, it was reported that both Samsung and SK Hynix plan to increase investment in semiconductor equipment in 2024. Samsung Electronics plans to invest 27 trillion won (approximately US$20.78 billion), an increase of 25% from this year; while SK Hynix plans to invest 5.3 trillion won (approximately US$4.07 billion), an increase of 100% from this year.
In addition to increasing investment in semiconductor equipment, Samsung Electronics and SK Hynix have also increased their production capacity targets for 2024. Samsung Electronics plans to increase DRAM and NAND flash memory production by about 24%, while SK Hynix aims to restore DRAM production to the level of the end of 2022.