Micron reports strong quarter despite COVID-19

micron hq in boise
Micron reported its second fiscal quarter was strong despite COVID-19, but demand for smartphones, consumer electronics and autos will be below expectations for the second half of the fiscal year. (Micron)

Micron Technology reported strong second fiscal quarter earnings with $4.8 billion in revenues, but COVID-19 has still left its mark.

The memory and storage producer has more than 37,000 employees in 18 countries with two having tested positive for the virus, CEO Sanjay Mehrotra said in a conference call on Wednesday from the safety of his home.

“At the two sites where we have confirmed cases, we have used contact tracing to quarantine individuals who were in close contact with either infected team member,” he said, according to a transcript from The Motley Fool. “We also have implemented more restrictive controls of on-site access, social distancing and service protocols.”

Free Daily Newsletter

Interesting read? Subscribe to FierceElectronics!

The electronics industry remains in flux as constant innovation fuels market trends. FierceElectronics subscribers rely on our suite of newsletters as their must-read source for the latest news, developments and predictions impacting their world. Sign up today to get electronics news and updates delivered to your inbox and read on the go.

Nonetheless, he said the virus has not impacted Micron manufacturing operations “thus far.”

The virus has, however, had an impact on China’s economic growth with a sharp decline of smartphone and auto sales, he noted. Weaker sales of consumer electronics and factory shutdowns in China posed “headwinds” for Micron, he noted. 

The company’s second fiscal quarter ended Feb. 27 with its $4.8 billion in revenue at the high end of analyst projections. That compares to $5.84 billion for the same period in 2019. Net income was $517 million. Investors were apparently encouraged by the report, with the stock surging more than 5% on Thursday, ending the day at $44.79.

Micron expects data center demand in all regions to be strong in its third quarter, along with a recent increase in demand for notebook computers used in commercial and education segments to support work-from-home and virtual learning, Mehrotra added. In fact, he reported that Micron quickly purchased 5,000 notebook computers to allow its workers to work from home.

Micron’s view on strong data center demand for its products could be a silver lining in the COVID-19 crisis. “The COVID-19 epidemic has unexpectedly breathed life into the server market, as most normal activities have been replaced by a virtual ecosystem,” wrote Robert Castellano, a market analyst who writes the Semiconductor Deep Dive.

“Nevertheless, as the world deals with the outbreak of COVID-19, we expect that overall demand for smartphones, consumer electronics and automobiles will be below our prior expectations for the second half of our fiscal 2020,” Micron's Mehrotra said. “Once the U.S. and other major economics have demonstrated containment of the virus’ spread, we expect a rebound in economic activity.”

He said the COVID-19 situation is “rapidly evolving, and disruptions could be much larger than we can see today.” Nonetheless, he laid out a vision of the semiconductor industry able to resume long-term growth with annual growth in DRAM demand to be in the mid-to-high teens and NAND in the 30% range. “For both DRAM and NAND, we expect our multiyear supply growth CAGR to be in line with the industry’s demand growth CAGR,” he said.

On Thursday, Analog Devices reported it is withdrawing its outlook for the fiscal quarter ending May 2, citing supply chain disruption and uncertainty around future demand.

RELATED: Semi industry wants ‘essential’ status to sustain production with coronavirus

Suggested Articles

Researchers at Nvidia think AI will be used to help learn laws of physics to help train machines and vehicles learn how to move and manuever.

Displays are now liberated from rectangular formats; Smart algorithms and inspection and repair technology advances make it easier to design them.

Hyris bCUBE testing device for surface COVID-19 relies on AI to process data