The latest quarterly financial report from the major memory chip manufacturer Micron has brought new hope to the year-end chip market.
On December 21st, Micron announced financial results for the latest quarter, which exceeded both analyst expectations and the company’s own forecasts. CEO Sanjay Mehrotra believes that product pricing will rebound next year, with the upward trend continuing until 2025, aiming for Micron to reach operational innovation highs by 2025.
Micron’s Impressive Financials
According to Micron’s financial data, in the latest quarter, the company’s revenue reached $4.73 billion, surpassing the previous quarter’s $4.01 billion and the same period last year’s $4.09 billion.
Looking ahead to the next quarter, Micron expects revenue to be between $5.1 billion and $5.5 billion, surpassing analyst expectations of $4.99 billion. The company also anticipates a narrowing of the loss per share to between $0.21 and $0.35, more optimistic than Wall Street’s expected $0.62.
In terms of market share, Micron is the world’s third-largest memory chip giant, following South Korea’s Samsung and SK Hynix. In product lines, Micron is the second-largest memory manufacturer globally and the fifth-largest flash memory manufacturer, indicating significant performance in the industry.
Memory Chip Outlook Until 2025?
Micron CEO Sanjay Mehrotra stated, “Strong execution and pricing strategies led to Q1 financial results exceeding expectations.” He also believes that memory chip prices will rise next year, continuing the upward trend until 2025. In his statement, Mehrotra reiterated that 2024 will be a year of recovery for the memory industry, and Micron aims to reach operational innovation highs by 2025. Mehrotra also predicts that Micron’s fundamentals will improve in 2024, positioning itself to leverage the significant opportunities brought by AI to the entire market.
Mehrotra pointed out that Micron has already sold all of the high-bandwidth memory (HBM) manufactured in the 2024 fiscal year. This memory is crucial for creating fast chips needed for AI software in computers.
HBM is one of Micron’s most profitable products, partly due to its technical complexity. Micron’s marketing director has previously stated that HBM is the most complex product ever designed in the history of the DRAM industry.
Micron is also attempting to recover from the declining market for smartphones and PCs over the past year. Due to high customer inventory levels, prices had previously experienced significant declines. However, it is expected that the number of PCs will slowly grow by low to mid-single-digit percentages in 2024 after experiencing a decline over the past two years. While there are signs of a recovery in smartphone demand, the growth in 2024 is expected to be moderate.
Looking at the entire storage industry, with upstream manufacturers reducing production, cutting capital expenditures, and the continued recovery of demand, the storage market is gradually warming up.
According to TrendForce’s consulting estimates, the first-quarter 2024 average prices for Mobile DRAM and NAND Flash (eMMC/UFS) are expected to increase by 18% to 23%. Observing the production plans of smartphone OEMs in the first quarter of 2024, they remain steady. Due to the clear upward trend in memory prices, buyers are actively expanding their purchasing demand to build secure and relatively low-cost inventory levels.
According to Gartner data, the global semiconductor market is expected to grow by 16.8% year-on-year to $624 billion in 2024, with the most significant growth driver coming from memory chips (expected to rebound by 66.3% in 2024). According to the latest monitoring data report from Yole Intelligence on the storage chip market, the storage chip market is expected to start recovering in Q4 of this year, with supply shortages and price increases becoming the main characteristics from 2024 to 2025.
