By Samrhitha A and Stephen Nellis
(Portal) – Micron Technology on Wednesday forecast a wider-than-expected first-quarter loss and its shares fell 2.4%, even as the company prepared to ramp up production of new product lines and said it was working to hire suppliers of to become Nvidia
The Idaho-based chipmaker’s first-quarter revenue forecast beat Wall Street estimates, driven by demand for its memory chips from the fast-growing artificial intelligence sector.
The company’s shipments benefited from strong demand for AI servers and processor suppliers that support large language models that enable generative AI. The company said it is working with Nvidia, the world’s most valuable chipmaker, to qualify its latest high-bandwidth memory chips for use in Nvidia’s computer chips.
The qualification process is common among technology companies and does not indicate how much business a supplier might win from a customer.
Demand for high-bandwidth memory chips, a market led by Nvidia supplier SK Hynix, for use in AI has also raised investor hopes that Micron can weather a slow recovery in other end markets. Micron said it expects to begin producing lucrative high-bandwidth memory, used in many AI chips, next year.
Some Micron products have been banned from certain Chinese customers after the Chinese government said the products had failed a safety inspection.
“Although there is a short-term impact on our demand due to these challenges in China, we remain focused on maintaining Micron’s global market share,” Micron CEO Sanjay Mehrotra said in a statement.
Micron expects adjusted revenue of $4.40 billion for the current quarter, plus or minus $200 million, compared with estimates of $4.20 billion, according to LSEG data.
The company forecast an adjusted loss per share of $1.07, above analyst estimates of 95 cents per share.
Fourth-quarter revenue was $4.01 billion, compared to estimates of $3.91 billion.
(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Shounak Dasgupta, Josie Kao and David Gregorio)