- Micron Technology sees immense growth for semiconductors in 5G and electric vehicles, CEO Sanjay Mehrotra told CNBC on Thursday.
- "We really see a healthier and more robust demand environment than ever," he said.
- Micron's revenue for the third fiscal quarter rose 36% to $7.42 billion, topping estimates of $7.24 billion.
Micron Technology sees immense growth for semiconductors in 5G and electric vehicles as world economies recover from the pandemic, CEO Sanjay Mehrotra told CNBC on Thursday.
"The markets today are more diversified than ever. Automotive, electric vehicles requiring more memory and storage — actually becoming data centers on wheels in the future — and certainly smartphones, data centers, gaming, industrial applications" are all contributing to increased need for chips, Mehrotra said on "TechCheck." "We really see a healthier and more robust demand environment than ever."
Micron — which makes memory chips used for data storage, smartphones and a range of other computing devices — reported better-than-expected quarterly sales and profit on Wednesday. Its fourth-quarter revenue guidance also topped analyst projections.
The chipmaker forecast fourth-quarter revenue of $8.2 billion, plus or minus $200 million, while analysts on average were expecting $7.87 billion, according to IBES data from Refinitiv.
In its fiscal third quarter, Micron's revenue jumped 36% to $7.42 billion, when Wall Street had been looking for $7.24 billion, according to Refinitiv. Per-share earnings of $1.88, excluding items, beat forecasts of $1.72.
The pandemic has resulted in a "digital transformation acceleration," Mehrotra said, and a pronounced shortage of semiconductors that's rippled across the global economy. On Wednesday, for example, Ford Motor announced another round of production delays stemming from the chip crunch.
However, higher prices due to the supply squeezes and the Covid-era shift to remote work have helped Micron.
Going forward, Mehrotra expects further tailwinds for the company sparked by technological shifts in areas such as wireless networks. He said 5G technology, particularly in smartphones, artificial intelligence, intelligent edge and smart user devices, have been key sources for demand growth since they all require more data memory and storage.
Despite the optimistic outlook, Mehrotra said the company is being "extremely prudent" in its approach to fabrication plants and capacity. "We want to grow our supply in line with the long-term demand trends," the CEO said.
But at the moment, he said, Micron inventories are "running very lean," with the company expecting industry shortages lasting through the end of this year and into 2022. "The shortages, as they get alleviated, will continue to open up pent-up demand, as well," he said.
Shares of Micron closed down 5.7% on Thursday to $80.11 apiece. The stock is up more than 6% year to date.
— Reuters contributed to this report.