(Bloomberg) — Micron Technology Inc. forecast an improving memory chip market but said it recently halted shipments to Huawei Technologies Co., a major customer.
Revenue in the fiscal first quarter will be $5.2 billion, plus or minus $200 million, the Boise, Idaho-based company said in a statement. Analysts were looking for $5.33 billion.
Investors were concerned that owners of massive cloud data centers have been cutting back on orders as they work through stockpiles of previously purchased components. The company calmed some of these concerns on Tuesday.
“We look forward to improving market conditions throughout calendar 2021, driven by 5G, cloud and automotive growth,” Chief Executive Officer Sanjay Mehrotra said.
In a presentation, Micron said it halted shipments to Huawei on Sept 14. The Chinese tech giant has been hit recently by more U.S. government action designed to cut it off from suppliers.
Micron also warned that demand from corporations was weaker due to lower IT spending and somewhat higher inventories at some customers.
Smartphone, auto and consumer end markets have started to recover and cloud and laptop demand continues to be healthy, Micron added in the presentation.
Micron shares fell 1% in extended trading. The stock is down for the year, while the benchmark Philadelphia Semiconductor Index is up more than 20%.
Memory chips from Micron are a key part of all types of computers — from laptops to servers and smartphones. The company competes with Samsung Electronics Co. in the market for the two main types of this component: dynamic random access memory and flash memory.
In August, Micron warned it was unlikely to meet its earlier revenue guidance as customers delayed purchases.
On Tuesday, the company reported fiscal fourth-quarter net income of $988 million, or 87 cents a share, up from $561 million, or 49 cents a share, in the same period a year earlier. Revenue was $6.06 billion, versus $4.87 billion a year ago.
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