Micron "Memory Semiconductor Bottom Passed"... Sales Expected to Exceed Forecast (Update)

Performance Expected to Exceed Forecasts Amid Growing AI Demand

U.S. semiconductor company Micron announced better-than-expected results for the third quarter of its fiscal year, driven by increased demand for artificial intelligence (AI). Micron indicated that the oversupply in the memory semiconductor industry has eased and the market has bottomed out, suggesting the end of the downturn is near.

On the 28th (local time), Micron reported that its revenue for the third quarter of fiscal year 2023 (March to May) was $3.75 billion, down 50.7% compared to the same period last year. The net loss was $1.896 billion, with a loss per share of $1.43, marking a return to the red.

Both quarterly revenue and loss per share exceeded analysts' expectations (revenue of $3.69 billion, loss per share of $1.59).

Sanjay Mehrotra, CEO of Micron, stated, "We believe the memory industry has passed the bottom," adding, "As the industry's supply-demand balance gradually recovers, margins are expected to improve."

Due to the economic downturn in the second half of last year, demand for smartphones and personal computers slowed, leading to inventory buildup in the semiconductor industry and a sharp decline in purchase orders. However, Micron explained that customers are now clearing their semiconductor inventories and returning to purchasing.

The AI boom is also positive. Experts predict that with the development of generative AI, the demand for data to process large-scale language models will significantly increase, leading to a substantial rise in demand for AI semiconductors. CEO Mehrotra said, "In the long term, Micron's technological leadership, product portfolio, and excellent management strengthen our competitive position in various growing markets, including AI and memory computing."

However, he expressed concern that China's sanctions banning the sale of Micron products could become a significant headwind slowing Micron's recovery.

Micron forecasted that its revenue for the fourth quarter of the fiscal year (May to August) would reach $3.9 billion.

Micron's stock price rose about 5% in after-hours trading following the earnings announcement.