Buoyed By Robust Earnings, Micron Technology, Inc. (NASDAQ:MU) Decides to Expand Manufacturing of Memory Chips


Micron Technology, Inc. (NASDAQ:MU), which is engaged in the manufacturing and supply of memory chips across the world, is optimistic demand for memory chips in the future ahead. The company ended another quarter with excellent results.

The global leading chip maker has decided to build another plant to meet the growing demand for memory chips worldwide. The company will build the production plants in Japan and Singapore for NAND (flash memory chips) and DRAM Memory chips. Estimated spending for these proposed production facilities is around $7.5 billion.

The new production plants will become operational in the next year. However, experts feel the demand for memory chips may ease by the end of 2019. It creates a danger for Micron. But, the executives at Micron are upbeat on the demand for memory chips.

According to the renowned analysts and Mr. Sanjay Mehrotra, the Chief Executive Officer of Micron, the memory industry has a changed a lot from those times of short term spikes and the demand for memory is here to stay. There is a growing demand for memory chips in the data centers.

The demand for PC DRAM was almost seven times higher for the data center when compared to the server. The DRAM demand is almost twice for the servers as on today.

The demand for products and services that use artificial intelligence and autonomous cars will increase considerably in the foreseeable future where the memory chips will be in great need. The use of memory chips will also be in great demand from the personal computers and Smartphone since the advanced technologies require better and faster memory.

After the announcement of additional investments to augment the capacity, the shares of Micron have dropped by 3% as investors are more worried. However, this sentiment towards Micron is temporary. It will be better positioned to increase the revenues.

Micron has posted earnings of $7.5 billion, an increase of 58%, in fiscal Q2 2018, when compared to the same period the previous year.

Micron is a leader in offering innovative storage solutions and memory. The company’s product line consists of 3D Xpoint memory, NOR Flash, NAND and DRAM.

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