Micron Technology said on Tuesday it had resumed supplies to Huawei, its largest customer, over the past two weeks and expected chip demand to recover in the second half of this year. Affected by this, Micron, which closed down more than 1.5% that day, rose more than 10% after th

(Observer Network News)

According to Reuters reported on June 26, Micron Technology Company (hereinafter referred to as: Micron ) said on Tuesday (25th) that in the past two weeks, it has returned to the number one position. Customer Huawei supplies, and chip demand is expected to recover in the second half of this year.

Affected by this, Micron, which closed down more than 1.5% that day, rose more than 10% after the market closed.

Also on the 25th, the New York Times stated that Intel has also resumed some shipments to Huawei. However, Intel declined to comment on this news, and its stock price rebounded slightly after the market closed.

It is worth mentioning that on the 21st, the Semiconductor Industry Association (The Semiconductor Industry Association), whose members include these two companies, stated that the U.S. government has determined that some chips are not included in the sales ban. "It is now very "Clearly, certain goods can be supplied to Huawei in accordance with the Entity List and applicable regulations."

But the association noted that virtually every company was affected by the ban.

Screenshot of Reuters report

"The ban cost Micron $200 million"

Reuters said that on Tuesday, Micron released its third quarter financial report for fiscal year 2019. Although both revenue and net profit fell year-on-year, they still exceeded external expectations.

's financial report shows that as of May 30, Micron's third-quarter revenue was US$4.788 billion, compared with US$7.797 billion in the same period last year; net profit was US$840 million, a year-on-year decrease of 78%. After the

financial report was released, Micron President Sanjay Mehrotra held a conference call with investors at 2:30 pm that day. At the meeting, he mentioned the impact of the U.S. ban on Huawei on Micron: Huawei is Micron’s largest customer, and the ban caused Micron to lose up to US$200 million in revenue in the quarter.

The device chipmaker, based in

, has resumed shipments of some chips to Huawei in the past two weeks after reviewing the U.S. ban on Huawei, Mehrotra said.

He said: "We have determined that we can legally resume (supply to Huawei) some of our existing products because they are not subject to export administration regulations and entity lists."

The executive continued: "However, there are concerns about Huawei There is still considerable uncertainty about the situation, and we cannot predict the volumes or deadlines we will be able to ship to Huawei."

After Mehrotra's speech, Micron's stock price rebounded by more than 10% in after-hours trading. %.

Micron stock price, screenshot source: Futu Niuniu

Micron cuts production and compresses capital expenditures

Reuters pointed out that the chipmaker's stock price has fallen in the past few months due to falling demand for smartphones and memory chips such as DRAM and NAND Supply exceeds demand. This has led to concerns that the semiconductor industry's two-year rally is about to stop.

In response to the above changes, Micron chose to reduce production.

The company announced on Tuesday that it would cut production by 10% and continue to invest more money in developing next-generation chips.

However, Micron executives also said they expected chip demand to recover in the second half of this year. According to metal data provider Refinitiv (Observer Network Note: formerly the financial and risk industry department of Thomson Reuters ), Micron's revenue in the fourth fiscal quarter will fall between 4.3 and 4.7 billion US dollars.

At the same time, Micron continues to reduce capital expenditures. For the capital-intensive chip manufacturing industry, this indicator has attracted much attention.

Micron said its capital expenditures in fiscal 2020 will be lower than the US$9 billion expected in fiscal 2019, and far lower than its original planned expenditure plan of US$10.5 billion.

"Every company is affected by the ban"

On the same day that Micron announced the resumption of shipments to Huawei, the New York Times reported that Intel had also resumed some shipments to Huawei. In this regard, Intel declined to comment.

Meanwhile, Intel and the US Semiconductor Industry Association sponsored by Micron pointed out that the US government has determined that some chips are not subject to the sales ban.

"As we have discussed with the U.S. government, it is now clear that certain goods can be provided to Huawei under the Entity List and applicable regulations." The association said in a statement: "(Because of the relevant policies,) each company Companies will be affected to varying degrees based on their specific products and supply chains, and each company must evaluate how to best conduct business and remain compliant."

On May 15, local time, the U.S. Department of Commerce announced. , plans to put Huawei and 70 of its branches on the "Entity List", which will prohibit Huawei from purchasing from US company suppliers. After that, Micron and some chip manufacturers suspended supply to Huawei.

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