Micron Technology Inc on Thursday forecast second-quarter revenue above Wall Street estimates as a global shift to remote work and a recent uptick in 5G smartphone adoption drove demand for its chips.
Shares of the Boise, Idaho-based company rose 1.4% in after-market trading, buoyed by strong demand for Micron’s memory chips for laptops and server chips for data centers.
Micron struggled with low prices for its chips over the past year because of an abundance of supplies, but Chief Executive Sanjay Mehrotra said supplies are expected to tighten in 2021 as the global economy recovers from the pandemic.
“We are past the bottom, and the industry is in tight supply across major market segments,” he told investors on a conference call.
The chipmaker expects current-quarter revenue of $5.8 billion, plus or minus $200 million, while analysts on average were expecting $5.50 billion, according to IBES data from Refinitiv.
The company’s revenue for the first quarter rose about 12% to $5.77 billion, beating estimates of $5.73 billion.
Excluding items, the company earned 78 cents per share, above estimates of 71 cents per share.
Micron makes both NAND memory chips that serve the data storage market and the DRAM chips that go into devices, and has benefited from the boom in chip sales as remote workers snapped up laptops and companies expanded data centers to support web-based software.
But the company was hit last year by U.S. government restrictions that stopped all of its sales to Huawei Technologies Co Ltd, a major customer.
Company officials said in September they were working to obtain licenses to resume sales but have not disclosed whether they have yet been granted. The company raised its fiscal first quarter guidance in early December and said on Thursday that a “better-than-expected transition of Micron’s mobile business from Huawei to other mobile customers also contributed to our revenue upside” in its fiscal first quarter of 2021.
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