Financial Report Outlook | Chip Revival Cycle Begins Micron Technology (MU.US) Can it "Add Fuel" Again?

The largest storage chip manufacturer in the United States, Micron Technology, Inc. (MU.US), will announce its first quarter earnings for the 2025 fiscal year after the U.S. stock market closes on Wednesday (early morning on December 19, Beijing time). Wall Street predicts that Micron's revenue for this quarter will reach $8.72 billion, an 84% increase compared to the previous year, with profits reaching $1.84 billion, or $1.58 per share, while the company had a loss of $1.23 billion, or $1.12 per share in the same period last year. Upward cycle in the chip industry quietly begins Micron's performance in the last quarter and its performance outlook data indicate that the company has endured the worst period of the entire chip industry cycle and is now moving back towards profitability, especially with the surge in spending on artificial intelligence (AI). Micron's CEO, Sanjay Mehrotra, pointed out that there is exceptionally strong demand for high-end storage chips in data centers to assist in developing AI software/applications. Analysts expect that this quarter, the revenue for the DRAM business will reach $5.92 billion, showing a potential 72.9% increase year-on-year; and the revenue for the NAND business will reach $2.6 billion, a significant 111.5% increase year-on-year. Data released by Counterpoint shows that in the third quarter of 2024, the global semiconductor industry saw a 17% year-on-year revenue growth, reaching $158.2 billion, primarily driven by demand for AI technology and the recovery of the memory industry. NVIDIA Corporation and AMD have experienced significant growth in the field of AI and have become major beneficiaries. This trend is expected to continue in the fourth quarter of 2024, particularly driven by the launch of new products. Receiving $6 billion in federal grants A week before the earnings announcement, Micron Technology, Inc. received a federal government grant of up to $61.65 billion for producing semiconductors in the U.S. based on the 2022 "Chip and Science Act". The U.S. Department of Commerce stated that this funding will support Micron's "twenty-year vision" to invest approximately $100 billion in New York state and $25 billion in Idaho, to establish new factories and create around 20,000 jobs.