Micron reports record revenues despite inventory issues

Micron Technology, a leading semiconductor manufacturer, reported significant revenues of $8.05 billion for the quarter that ended on December 31, 2024. This marks a substantial increase of 38 percent compared to the same period last year, although it reflects an 8 percent decline from the previous quarter after seven consecutive quarters of growth. The company’s success is primarily attributed to its DRAM and NAND products, largely driven by increased demand from datacenter servers requiring high-bandwidth memory (HBM). However, sales outside the datacenter market showed a downturn, as many buyers were depleting existing inventory rather than making new purchases. In its product breakdown, DRAM revenues stood at $6.1 billion, representing a 47 percent increase year-on-year, even as it declined 4 percent from the prior quarter. This growth primarily stems from the rising popularity of high-bandwidth memory solutions among clients. NAND revenues also saw an upsurge of 18 percent year-on-year, reaching $1.9 billion, although they witnessed a notable drop of 17 percent from the previous quarter, indicating challenges in maintaining production levels. CEO Sanjay Mehrotra expressed optimism about future growth, highlighting that datacenter revenues had tripled year-on-year. Furthermore, Micron's performance has been notably strong in the datacenter market, where it achieved new milestones in market share concerning SSDs across several categories. This is indicative of a growing trend in the datacenter segment, particularly amidst applications in artificial intelligence (AI) that are fueling demand for more advanced memory solutions. Hence, the outlook for the upcoming quarters remains positive, considering that Micron expects to resume growth in bit shipments and enhance its market share in the datacenter NAND segment by 2025. However, challenges persist in other segments of the business. The mobile and embedded markets have experienced a downward trajectory due to clients adjusting their inventories, which has affected revenues significantly. With the automotive industry affecting embedded market revenues and consumer demand also fluctuating, the revenue from these segments declined by 32 percent year-on-year for mobile and 10 percent for embedded applications. Despite these challenges, Micron remains confident about an anticipated rebound, banking on increased demand for advanced DRAM as speculation surrounding AI-capable PCs rises.