Tag: Sanjay Mehrotra

Asian chip stocks rally after Micron’s bullish forecast signals easing supply glut

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The headquarters building of Micron Technology Inc. stands in Boise, Idaho, U.S.

Matthew Staver | Bloomberg | Getty Images

Shares of Asian chipmakers rallied on Thursday after Micron Technology‘s bullish outlook overnight, which indicated the sector’s supply glut may finally be easing.

The U.S. chipmaker reported third quarter earnings that beat estimates, thanks to higher demand for its memory chips driven by the booming A.I. sector.

“We believe that the memory industry has passed its trough in revenue, and we expect margins to improve as industry supply-demand balance is gradually restored,” CEO of the U.S. memory chipmaker Sanjay Mehrotra said in a statement.

Shares of Japanese semiconductor company Electron rose 3.26%. Hong Kong-listed Hua Hong Semiconductor added 1.82%. South Korea’s SK Hynix traded 1.67% higher.

Micron’s shares rose 3% in extended trading hours.

However, China’s ban on Micron’s chips remains a “significant headwind” that is impacting the company’s outlook and slowing its recovery, Mehrotra cautioned.

Last month, Chinese authorities announced Micron products failed its network security review and declared it a “major security risk” to China’s critical information infrastructure.

Micron’s third-quarter revenue came in at $3.752 billion, beating Reuters’ estimates of $3.646 billion, data from Refinitiv showed.

“We have increased confidence that the industry has passed the bottom for quarterly revenue and year-on-year revenue growth,” Mehrotra added.

Patrick Moorhead, CEO of Moor Insights & Strategy is upbeat about Micron.

“If you’re looking long term, Micron is good bet because it has advantages technologically that its competitors don’t,” he told CNBC’s “Street Signs” on Thursday.

However, he highlighted that while Micron is going to get some lift from the advent of AI, the overall server market is still lagging, a view echoed by the company.

“Generative A.I. is driving higher-than-expected industry demand for memory and storage for A.I. servers, while traditional server demand for mainstream data center applications continues to be lackluster,” Micron’s statement said.

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June 28, 2023
Micron announces layoffs, cost cutting as chip demand drops

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BOISE, Idaho — Micron will reduce its workforce by 10% next year and take other cost-cutting measures as the computer memory chip maker struggles to deal with too much supply amid a drop in demand.

Micron CEO Sanjay Mehrotra announced the restructuring during during a quarterly conference call with investors Wednesday, noting that prices for computer memory products had “deteriorated significantly” in recent months, Boise television station KTVB reported.

The company will cut staff by about 10% throughout 2023 through voluntary departures and layoffs, according to a filing with the Securities and Exchange Commission. Employee bonuses will also be suspended next year and executive salaries will be reduced for the remainder of the 2023 fiscal year which runs through August, the company said.

The Boise, Idaho-based company has about 48,000 employees across 38 sties in North America, Europe and Asia — including more than 5,000 people in Boise. It has not announced where the layoffs will occur.

In September, Micron announced it was investing $15 billion through the end of the decade on a new semiconductor plant in Boise expected to create 17,000 American jobs. The following month, the company announced another semiconductor plant would be built in upstate New York, promising a long-term investment of up to $100 billion and a plant that could bring 50,000 jobs to the state. The restructure is not expected to affect those plans.

At the time, Mehrotra said the investments were made possible by the federal CHIPS and Science ACT of 2022, a $280 billion bill aimed at bolstering U.S. competitiveness against China. The law sets aside $52 billion to bolster the semiconductor industry, which had struggled to manufacture the memory chips powering smartphones, cars and computers because of COVID-related supply chain issues.

But in recent months, the company has seen a dramatic drop in demand. Unit volumes for personal computers and smartphones have declined in 2022, Mehrotra noted. The company primarily makes two kinds of chips: NAND, which saves data when power is removed, such as in a portable flash drive, and DRAM, which must be powered on to hold data.

“The industry is experiencing the most severe imbalance between supply and demand in both DRAM and NAND in the last 13 years,” he said. “Micron is exercising supply discipline by making significant cuts to our capital expenditures and wafer starts while maintaining our competitive position.”

The restructure plan was part of Micron’s announcement of financial results for the first quarter of the company’s fiscal year, which ended Dec. 1. Revenue came in at just under $4.1 billion for the quarter, down from more than $6.6 billion the previous quarter.

Still, Mehrotra said demand is expected to increase next year by about 10% for DRAM and about 20% for NAND.

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December 22, 2022
Semiconductor maker Micron announces 10% staff reduction, suspends bonuses
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Semiconductor maker Micron announced Wednesday that it would reduce its headcount by about 10% in 2023, in the latest example of a technology industry slowdown affecting employment.

Shares of Micron fell more than 1% in extended trading.

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Idaho-based Micron has about 48,000 employees, according to a recent SEC filing. The company said it would hit its reduction target through voluntary departures as well as layoffs.

Micron also said it is suspending 2023 bonuses.

“On December 21, 2022, we announced a restructure plan in response to challenging industry conditions,” the company said in an SEC filing. “Under the restructure plan, we expect to reduce our headcount by approximately 10% over calendar year 2023, through a combination of voluntary attrition and personnel reductions.”

Micron said it expected a $30 million charge in the current quarter related to the restructuring, which will also include less investment into manufacturing capacity and cost-cutting programs.

The move comes as Micron reported fiscal first-quarter 2023 results where it missed analyst estimates for earnings and revenue, and forecast a larger loss per share than expected in the current quarter.

Here’s how Micron did versus Refinitiv consensus estimates for the quarter ending in December:

Loss per share: $0.04, adjusted, versus $0.01 estimated

Revenues: $4.09 billion versus $4.11 billion estimated

Micron said it expected a loss of 62 cents per share on revenue of $3.8 billion in the current quarter. Analysts had expected guidance of a loss of 30 cents per share on $3.75 billion in sales.

Micron is best known for supplying memory to computer makers, but it is facing an environment where PC sales have already started to slow or shrink, while server sales are expected to show little growth in 2023.

Micron CEO Sanjay Mehrotra said in prepared remarks that there is too much memory supply and not enough demand, which has resulted in the company keeping more inventory and losing pricing power.

“In the last several months, we have seen a dramatic drop in demand,” Mehrotra said, according to the prepared remarks.

He said he expects the company’s profitability to “remain challenged” through the end of 2023 but that the firm expects revenue and free cash flow to recover later in 2023. Micron said it has suspended share repurchases.

Micron’s restructuring comes after other semiconductor companies have announced hiring freezes or layoffs. In October, Intel announced that it would lay off workers as part of a plan to cut $10 billion in spending. Nvidia announced a hiring slowdown over the summer, and Qualcomm announced its hiring freeze in November.

But it’s not just semiconductor companies adjusting after two pandemic-fueled years of growth and supply issues. Tech companies including Meta, Twitter, Snap, Stripe and Tesla have also cut staff as companies gird for a potential recession and higher interest rates.
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December 21, 2022
This Kanpur-born Indian-origin CEO promises to invest $100 bn, create 50,000 jobs in New York

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Kanpur-born Indian-origin CEO of Micron Technology, Sanjay Mehrotra, has pledged an investment of $100 billion over 20-plus years and creation of thousands of jobs in New York. Mehrotra said in a LinkedIn post that he met US President Joe Biden, and showcased the future plans of his company and the creation of the largest semiconductor fabrication facility in the history of the US.

“Today, I was humbled to meet with President Biden, introduce him to some of the Micron team, and showcase Micron’s plans for our future megafab in Clay, New York. This $100B investment over the next two decades will create the largest semiconductor fabrication facility in the history of the United States,” he said in the post.

Mehrotra said in the post that their company will create 50,000 jobs in New York and will partner with local colleges, universities and community organisation to build the workforce. He said that they aim to make New York the hub of leading-edge semiconductor manufacturing.

US President Joe Biden meets CEO of Micron Technology Sanjay Mehrotra

The fabs, part of Micron’s manufacturing network, will create memory chips that can be used in the most demanding applications worldwide. “Clay, New York will be able to say with pride that they are home to some of the most advanced semiconductor facilities anywhere in the world. We are proud to drive a vision for high-tech manufacturing leadership here in America,” he said.

The company further stated in a release that it will invest $250 million in the Green CHIPS Community Investment Fund, with an additional $100 million invested from New York, with $150 million from local, other state and national partners. “To secure US leadership in semiconductor manufacturing, cultivate American innovation and ensure economic and national security, it is imperative we come together to build and transform a workforce for the future. Our commitments through the Community Investment Framework represent the first foundational steps toward Central New York’s transformation,” said Mehrotra on President Biden’s visit.

New York Governor Kathy Hochul said that the project’s $500 million community fund will sustain the region in the long term with investments in workforce, housing, and infrastructure.

Micron Technology is a Nasdaq-listed company that focuses on innovative memory and storage solutions.

Micron’s founder Sanjay Mehrotra was born in Kanpur, and completed his schooling from Delhi’s Sardar Patel Vidyalaya. He moved to the US at the age of 18, transferring from BITS Pilani to University of California, Berkeley. He earned his BA and MA degrees in Electrical Engineering and Computer Science from University of California. Mehrotra then enrolled in Stanford University for an executive business degree. He was awarded an honorary doctorate by Boise State University. Mehrotra also holds around 70 patents.

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October 27, 2022