Global chip stocks experienced a significant rally on Thursday after Micron Technology, a leading US memory semiconductor maker, reported revenue guidance that exceeded market expectations.
Micron’s forecast for its fiscal first quarter, which ends in November, anticipates revenue of approximately $8.7 billion, plus or minus $200 million, surpassing analysts’ estimates of $8.28 billion.
In premarket trading, Micron’s shares surged by as much as 16%. This positive momentum also impacted other major semiconductor companies, with South Korean giants Samsung Electronics and SK Hynix seeing their shares rise by over 4% and 9%, respectively. The increase in SK Hynix’s shares was further supported by the company’s announcement of starting mass production of a new version of its high-bandwidth memory (HBM) chips, which are crucial for artificial intelligence applications.
In Japan, shares of Tokyo Electron surged by 8%, bolstered by the company’s CFO’s optimistic comments about a projected 15% rise in AI-related sales for the current fiscal year. Meanwhile, SoftBank Group, which holds a majority stake in chip designer Arm, saw its shares increase by more than 4%.
The enthusiasm in the Asian markets extended to Europe, where Dutch semiconductor equipment manufacturer ASML reported a gain of over 4% in early trading. Other European semiconductor stocks, including ASMI, Be Semiconductor, and STMicroelectronics, also experienced notable increases.
Analysts had previously expected Micron to issue below-consensus guidance, making the positive revenue forecast a welcome surprise. In its fiscal fourth quarter, Micron reported revenues of $7.75 billion, a significant increase from $4.01 billion a year earlier, and also reported a net income of $887 million.
Micron’s performance highlights ongoing strong demand for data center chips, particularly those used in artificial intelligence processes, reaffirming the company’s outlook that its high-bandwidth memory products are sold out for 2024 and nearly fully booked for 2025. The company’s leadership emphasized the healthy supply-demand balance within the memory market, suggesting a positive trajectory for future growth.
CNBC and Market Watch contributed to this report.
