Micron’s record revenue eclipsed by weak outlook

Business news | December 20, 2024

By Peter Clarke

Memory & Data Storage Analog Artificial Intelligence

Memory chip maker Micron Technology Inc. (Boise, Idaho) enjoyed record revenue in its first quarter of fiscal 2025 but saw its share price lose 15 percent on weak guidance given for 2FQ25.

The chip maker reported revenue of US$8.71 billion versus US$7.75 billion for the prior quarter and US $4.73 billion for the same period last year. The year-on-year increase was 84 percent. The company made a net profit of US$1.870 billion versus a loss of US$1.234 billion in the same quarter a year before.

However, the guidance for the 2FQ25 was for US$7.9 billion plus or minus US$200 million with a reduced gross margin.

“Micron delivered a record quarter, and our data center revenue surpassed 50% of our total revenue for the first time,” said Sanjay Mehrotra, CEO of Micron Technology, in statement. “While consumer-oriented markets are weaker in the near term, we anticipate a return to growth in the second half of our fiscal year. We continue to gain share in the highest margin and strategically important parts of the market and are exceptionally well positioned to leverage AI-driven growth to create substantial value for all stakeholders.”

In an analysts’ conference call Micron confirmed that its revenue boost had resulted from strong demand for DRAM, particularly in the high-bandwidth (HBM) format where Micron is gradually making market-share in-roads against its South Korean rivals Samsung and SK Hynix. The call also revealed a smartphone and consumer electronics inventory build-up and a weak demand for solid-state drives.

Mehrotra expressed confidence around Micron’s position in HBM – where it expects to ramp the volume supply of 12-layer HBM3E in 2025 and claims a leading position in HBM4.

In the conference call Mehrotra said that HBM4 and HBM4E – which will support customization in the base logic die – are expected to ramp to volume production in 2026.