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Micron says short-term production safe from the shock of supply in Ukraine, the cost will increase

FILE PHOTO: The logo of the American memory chip company MicronTechnology is displayed at its stand at an industrial exhibition in Frankfurt, Germany, July 14, 2015. REUTERS / Kai Pfaffenbach / File Photo

March 29, 2022

(Reuters) – Chipmaker Micron Technology Inc. said it expects no short-term impact on production due to component shortages due to the crisis in Ukraine, but costs are expected to rise.

Ukraine’s two leading neon suppliers, which make up about half of the global supply of the core chip component, have shut down, threatening to raise prices and exacerbate the ongoing semiconductor crisis.

Global chip production was already under pressure as the pandemic boosted demand for mobile phones, laptops and later cars, forcing some companies to cut production.

This same demand helped Micron forecast current quarter earnings above estimates and outperform second-quarter earnings, pushing stocks up more than 4%.

“At the moment we do not expect a negative impact on our short-term production volumes due to the Russia-Ukraine war, but we expect an increase in our costs as we ensure the supply of some raw materials that could be addressed,” CEO Sanjay Mehrotra told a news conference. after profits.

Recent efforts to diversify supply and maintain stocks of raw materials and noble gases have helped reduce the blow, he added.

The impact of the supply shortages due to Ukraine will not appear until seven to nine months later, when global stockpiles of raw materials are depleted, said Kinngai Chan, CEO of Semmit Insights Group LLC.

Micron forecast revenue of $ 8.7 billion for the current quarter, plus or minus $ 200 million, compared with analysts’ average estimate of $ 8.06 billion, according to Refinitiv.

Revenue rose 24.8% to $ 7.79 billion, beating estimates of $ 7.52 billion.

Micron also charged more for NAND and DRAM memory chips, helping gross profit margins to rise to 47.2% from 26.4% last year.

Excluding items, net income was $ 2.14 per share, higher than estimates for $ 1.97.

(Report by Yuvraj Malik in Bengaluru, additional by Jane Lanhee Lee in Auckland, California; Edited by Devika Syamnath)



Micron says short-term production safe from the shock of supply in Ukraine, the cost will increase

Source link Micron says short-term production safe from the shock of supply in Ukraine, the cost will increase

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