(Reuters) – Micron Technology Inc’s shares rose as much as 10% on Tuesday, as the memory-chip maker, said it had resumed some shipments for Huawei Technologies Co., Ltd and the expected demand for its chips, to recover later in the year.
FILE PHOTO: the Memory of the chip and parts of the united states memory-chip maker, MicronTechnology be displayed at their booth at an industrial trade fair in Frankfurt, Germany, on July 14, 2015. REUTERS/Kai Pfaffenbach
Chief Executive Sanjay Mehrotra said the Idaho-based maker of chips for mobile phones and other devices to resume in the shipping industry, a number of chips in the last couple of weeks on the basis of the U.S. ban on the sale of the products of the Chinese company.
“We determined that we could legally resume shipping, which is a subset of the current range of products, since they are not subject to the export administration regulations, and the entity list of the restrictions,” Mehrotra said on a conference call with the investment community.
“However, there is considerable ongoing uncertainty with regard to the Smartphone, and we are not in a position to have the ability to predict the volumes, or have periods of time where we will be in a position to ship the products to the Smartphone.”
For a Micron in the fiscal third quarter, which ended on the 30th of May, the company beat analysts ‘ estimates for its quarterly revenue and earnings. Mehrotra said the Smartphone was made Micron # 1 customer, and that the prohibition, at the expense of the company for as much as $200 million in missed revenue during the third quarter of the year.
Micron shares rose as much as 10%, to $35.95 in after-hours trading after the results.
Micron and other chipmakers are suspended the shipments to the Smartphone and after that the US government is the world’s largest telecom equipment maker, and 68 of the branches on the “Entity List” on the 15th of May.
The New York Times on Tuesday reported that Intel Corp. was also shipping some of our products of Huawei. Intel declined to comment.
In the semi-conductor Industry, of which Intel and Micron have both the backers, it is noted that the united states government had determined the number of chips as is not covered by the sales ban.
“As long as we are talking about the united states government, it has become clear that some of the items to be delivered to a Smartphone, in accordance with the Entity List and the applicable legislation,” the group said in a statement. “Every business is affected differently based on their own specific products and supply chains, each company must evaluate how best to conduct its business and to continue to live up to.”
Fish stocks, chipmakers have fallen in the past couple of months, as the demand for smartphones has declined and the prices of DRAM and NAND flash memory chips to sink a surplus, to add to that, a two-year-long, semi-conductor, everything was coming to a halt.
To soften the blow of a market glut, Micron’s reduced output in support of prices, and increase investment in the next generation of chips. The company said on Tuesday, cutting production by as much as 10%, to help its product range in line with the demands of the market.
But, Micron executives said they expected demand for its chips in the second half of calendar for 2019. The company’s estimated fiscal fourth-quarter revenue of $4.3 billion to $4.7 billion, with an average of slightly less than analysts ‘ estimates of $4.56 billion, according to data from the Refinitiv.
However, the company is also clamping down on the level of investment, a closely watched metric in the cash-intensive chipmaking business. Micron said that the tax by 2020 with the investment of less than $9 billion, is expected in fiscal 2019, far below its initial plan to spend $10.5 billion.
Net income attributable to Micron declined to $840 million, or 74 cents per diluted share, in the third quarter, which ended on the 30th of May, up from $3.82 billion, or $3.10 per diluted share, a year earlier.
Sales fell to $4.79 billion from $7.80 billion, beating analysts ‘ estimates of $4.69 billion, according to IBES data, Refinitiv.
On an adjusted basis, the company earned $1.05 per share. Analysts were expecting a profit of 79 cents per share.
Reporting Sayanti Chakraborty, Bengaluru, and Stephen Nellis in San Francisco; Editing by Shounak Dasgupta and Richard Chang