Micron CEO Sanjay Mehrotra Sees Growth in Automotive Semiconductors, 5G
Micron Technology sees immense growth for semiconductors in 5G and electric vehicles as global economies recover from the pandemic, CEO Sanjay Mehrotra told CNBC on Thursday.
“Today’s markets are more diverse than ever. Automobiles, electric vehicles requiring more memory and storage – in fact becoming data centers on wheels in the future – and certainly smartphones, data centers, games, industrial applications “all contribute to a increased need for chips, Mehrotra told “TechCheck”. “We are truly seeing a healthier and more robust demand environment than ever before.”
Micron – which makes memory chips used for data storage, smartphones, and a range of other computing devices – reported better than expected quarterly sales and profits Wednesday. Its revenue forecast for the fourth quarter also beat analysts’ forecasts.
The chipmaker expected fourth-quarter revenue of $ 8.2 billion, plus or minus $ 200 million, while analysts averaged $ 7.87 billion, according to IBES data from Refinitiv.
In its fiscal third quarter, Micron’s revenue jumped 36% to $ 7.42 billion, as Wall Street sought $ 7.24 billion, according to Refinitiv. Earnings per share of $ 1.88, excluding items, beat plan by $ 1.72.
The pandemic has resulted in an “acceleration of digital transformation,” Mehrotra said, and a severe shortage of semiconductors that is rippling through the global economy. On Wednesday, for example, Ford Motor announced a new round of production delays due to chip tightening.
However, higher prices due to supply squeeze and the shift from the Covid era to remote working have helped Micron.
In the future, Mehrotra expects new favorable winds for the company, driven by technological changes in areas such as wireless networks. He said 5G technology, especially in smartphones, artificial intelligence, smart edge and smart user devices, have been key sources of demand growth as they all require more memory and data storage. .
Despite the optimistic outlook, Mehrotra said the company was “extremely cautious” in its approach to factories and manufacturing capacity. “We want to increase our supply in line with long-term demand trends,” said the CEO.
But for now, he said, Micron’s inventories are “very meager,” with the company expecting shortages in the industry until the end of this year and through 2022. ” shortages, as they are alleviated, will continue to open up increasing demand as well, ”he said.
Micron shares closed 5.7% lower on Thursday at $ 80.11 apiece. The title is up more than 6% since the start of the year.
– Reuters contributed to this report.