Fiscal Q3 results

Micron reported record sales and a jump in profits in the third quarter and gave a higher outlook for the fourth quarter than market analysts. Micron will sell its Utah plant for $900 million to Texas Instruments as it switches its efforts to developing a new industry standard.

Micron Technology (MU) on Wednesday reported stronger-than-expected Wall Street results for its fiscal Q3, which ended in May.

Micron's earnings per share rose to $1.88 from $0.82 a year ago, above analysts' average estimates of $1.71. Total net profit nearly tripled to $1.74 billion from $803 million a year earlier. Micron CEO Sanjay Mehrotra said this was the "biggest consecutive increase in profits in the company's history", thanks to several record high-priced product sales.

Micron makes DRAM (dynamic memory) memory chips, which are typically used in data centre servers, PCs and other computing devices their sales account for 73% of the company's total revenue.

NAND chips used in smaller devices such as smartphones and USB drives account for 24% of Micron's revenue. Like most semiconductors, memory chips were in high demand during the COVID-19 pandemic and prices rose sharply.

Micron's total quarterly revenues rose 36% from a year earlier to $7.42 billion.

Micron's outlook for Q4 fiscal 2021

Micron expects DRAM demand to grow more than 20% year-over-year, with NAND growth of around 30%. Micron's Q4 forecast is $2.20 to $2.40 earnings per share, better than Wall Street's expectation of $2.18. The revenue forecast of $8 billion. $8.4 billion is also above market experts' estimates of $7.88 billion.

At the same time, Micron has warned investors that its capital expenditure for fiscal 2021 will exceed $9.5bn.

Micron sells its Utah plant for $900 million

Micron is selling its Utah plant for the production of certain types of memory chips to Texas Instruments (TXN), explaining that it is switching to the development and production of chips of another standard.

Micron plans to shift its efforts to a new industry standard for connecting memory chips to computing chips called Compute Express Link.

As the book value of Micron's plant was above $900 million, the company wrote off an impairment loss of $435 million.