Analyst Note| Abhinav Davuluri, CFA |
Micron reported strong fiscal third-quarter results, with revenue exceeding the high-end of guidance. CEO Sanjay Mehrotra noted the firm’s expectations for 2021 DRAM and NAND bit growth have increased relative to the prior quarter, due to the macroeconomic recovery from the pandemic as well as secular drivers such as AI and 5G. Furthermore, end market strength is driving unmet demand for both DRAM and NAND, with non-memory component shortages also impacting Micron’s customers’ demand. We expect the industry shortages to alleviate in the back half of 2021, but memory demand should remain robust into 2022 as chip customers are likely to raise their normalized inventory levels. Management also expects memory pricing to continue to increase during Micron’s fiscal fourth quarter (ending August 2021).