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Micron Technology Inc. warned that it will need to spend heavily on production to meet burgeoning demand, overshadowing a generally upbeat forecast from the largest US maker of computer memory chips.
Capital spending will exceed $25 billion this fiscal year, which runs through August, the company said as part of its quarterly report on Wednesday. Analysts had estimated $22.4 billion.
The heavy spending reflects the cost of keeping up with an insatiable appetite for Micron’s memory chips, especially the high-bandwidth components used in artificial intelligence computing. Though Micron’s sales are expected to keep soaring, the latest report drew a chilly reception from investors. The shares fell about 2% in late trading.
Hendi Susanto, a portfolio manager at Gabelli Funds, said he thinks Micron is in a good position structurally.
(Source: Bloomberg)