Micron CEO Sanjay Mehrotra sees semiconductor expansion in autos, 5G

Micron Technology sees huge advancement for semiconductors in 5G and electrical autos as earth economies get better from the pandemic, CEO Sanjay Mehrotra told CNBC on Thursday. 

“The marketplaces right now are far more diversified than ever. Automotive, electrical motor vehicles demanding extra memory and storage — truly becoming data facilities on wheels in the long run — and absolutely smartphones, data centers, gaming, industrial apps” are all contributing to increased want for chips, Mehrotra explained on “TechCheck.” “We really see a more healthy and additional robust demand from customers setting than at any time.”

Micron — which helps make memory chips used for knowledge storage, smartphones and a variety of other computing units — described far better-than-expected quarterly revenue and profit on Wednesday. Its fourth-quarter revenue steerage also topped analyst projections.

The chipmaker forecast fourth-quarter income of $8.2 billion, additionally or minus $200 million, though analysts on common have been anticipating $7.87 billion, in accordance to IBES data from Refinitiv.

In its fiscal 3rd quarter, Micron’s income jumped 36% to $7.42 billion, when Wall Street had been searching for $7.24 billion, in accordance to Refinitiv. For every-share earnings of $1.88, excluding items, beat forecasts of $1.72.

The pandemic has resulted in a “electronic transformation acceleration,” Mehrotra reported, and a pronounced shortage of semiconductors that’s rippled throughout the worldwide financial system. On Wednesday, for example, Ford Motor declared one more round of output delays stemming from the chip crunch.

Nonetheless, bigger costs owing to the provide squeezes and the Covid-era change to distant operate have aided Micron.

Heading forward, Mehrotra expects additional tailwinds for the firm sparked by technological shifts in places these kinds of as wireless networks. He said 5G technologies, specifically in smartphones, artificial intelligence, intelligent edge and intelligent person equipment, have been crucial resources for demand progress since they all require additional knowledge memory and storage.

Despite the optimistic outlook, Mehrotra explained the company is getting “exceptionally prudent” in its tactic to fabrication plants and capacity. “We want to increase our source in line with the extensive-expression need tendencies,” the CEO explained.

But at the instant, he stated, Micron inventories are “operating quite lean,” with the enterprise anticipating market shortages lasting through the finish of this year and into 2022. “The shortages, as they get alleviated, will go on to open up pent-up demand from customers, as nicely,” he mentioned.

Shares of Micron closed down 5.7% on Thursday to $80.11 apiece. The stock is up far more than 6% 12 months to day.

— Reuters contributed to this report.