Micron CEO calls bottom in memory-chip market, but weak PC, smartphone forecasts cut into expected AI gains

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'We believe that the memory industry has passed its trough in revenue, and we expect margins to improve,' Micron CEO Sanjay Mehrotra said.

Micron Technology Inc. shares rose in the extended session Wednesday after the memory-chip maker’s chief executive called the bottom on the sector, and quarterly results came in better than expected.

Micron Chief Financial Officer Mark Murphy said the company took about $400 million in inventory write-downs in the third quarter, contributing to negative gross margins of 16%, an improvement of 15 percentage points sequentially. When Micron reported its worst loss ever a quarter ago, the company had taken a $1.4 billion inventory charge. When Micron started flashing signs of negative margins earlier in the year, many analysts saw that as signs of a bottom on the horizon.

“As we have said before, AI servers have six to eight times the DRAM content of a regular server and three times the NAND content,” Mehrotra told analysts on the call. “In fact, some customers are deploying AI compute capability with substantially higher memory content.” Revenue dropped to $3.75 billion from $8.64 billion in the year-ago quarter, as a two-year shortage of chips, triggered by the COVID pandemic, flipped quickly, but unevenly, into a glut around this time last year. Analysts surveyed by FactSet had forecast a loss of $1.61 a share on revenue of $3.65 billion.

 

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Micron stock rises as CEO calls bottom in memory-chip marketMicron shares rose in the extended session Wednesday after $MU's chief executive called the bottom on the sector, and revenue came in slightly higher than expected. The company reported a third-quarter loss of $1.9 billion.
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