A week following NAND flash rival Western Digital (WDC) issued light advice for calendar Q3, Micron (MU) is tempering expectations for its November quarter.
Micron closed down 4.8% on Thursday right after CFO Dave Zinsner stated in the course of a Q&A session with KeyBanc Cash that Micron now thinks its November quarter (fiscal 1st quarter) income will be under an casual steering array of $5.4 billion to $5.6 billion. The direction vary was about based mostly on Micron’s Might quarter earnings ($5.44 billion) and what the firm’s August quarter direction would be all over if the quarter did not have an additional 7 days.
It is well worth noting in this article that many analyst estimates for Micron’s November quarter were — following the enterprise shipped improved-than-envisioned final results and steering in June — above its preliminary assistance vary. Likely into Thursday, the FactSet profits consensus for the quarter stood at $5.75 billion.
Also: When Micron is reiterating August quarter income assistance of $5.75 billion to $6.25 billion, Zinsner states the quarter is now wanting “a lot more again-conclusion loaded” than originally expected. Between the good reasons provided for this: Uncertainty among consumers pertaining to their memory needs more product qualifications than usual occurring toward the finish of the quarter and offer constraints connected to the reality that some stop-marketplaces have been more powerful than predicted (while others have been weaker than envisioned).
Curiously, Zinser explained that whilst demand from customers from cloud server consumers “proceeds to be healthy,” second-50 % revenue to them will most likely be under to start with-50 % gross sales, which ended up up strongly as COVID-19 served pull ahead desire. These remarks follow remarks from Western Electronic about how cloud support suppliers are “going into a digestion stage,” as well as kinds from DRAM and NAND rival Samsung about inventories remaining significant among the server memory prospective buyers.
Zinser also reported that business server desire is “obviously weak.” That remark is just not as well shocking, provided the latest steering and commentary from the likes of Cisco Devices (CSCO) , Intel (INTC) and Seagate (STX) .
With regards to cell memory demand, Zinsner was upbeat about robust 5G phone shipment expansion — also a boon for the likes of Qualcomm (QCOM) , Skyworks (SWKS) and Qorvo (QRVO) — and its positive affect on smartphone DRAM content, particularly within just lessen price tiers. But he did caution that Chinese telephone OEMs have inventory to do the job by way of, following stockpiling inventories in the latest quarters.
On the entire, Zinsner’s November quarter commentary wasn’t a whole shock, in light-weight of what some peers and buyers have shared around the previous several months. And even though a whole lot could rely on how macro disorders development, it really is value noting that Zinsner reiterated Micron stays upbeat about 2021 cloud and cell memory desire.
But at a time when The Philadelphia Semiconductor Index is up 19% on the year, and companies like AMD (AMD) and Nvidia (NVDA) are up far much more than that, the remarks are yet another indicator that some chip end-markets look to be softening a little ideal now.
Get an e mail inform each and every time I produce an posting for Actual Cash. Click on the “+Follow” upcoming to my byline to this post.