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Micron (MU) to Reportedly Make $1 Billion Investment in India
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Micron Technology (MU - Free Report) is on the verge of investing at least $1 billion in setting up a chip packaging facility in India, per a recent Bloomberg report. The company is likely to make an announcement this week while India’s prime minister, Narendra Modi, visits the United States, cited some anonymous sources. The Indian prime minister is starting his formal visit to the country on Jun 21.
One of the anonymous persons stated that the amount invested may rise up to $2 billion from $1 billion. Nonetheless, it might also occur that the concerned company does not close the deal. This move is expected to expand Micron’s global footprint amid the ongoing tensions between the United States and China. It would further create an opportunity to strengthen Washington’s key supply chains outside of China.
Last week, Micron promised to invest 4.3 billion yuan ($603 million) over the next few years in its chip packaging plant in China. Per the plan, the semiconductor company will be adding assembly lines at its existing chip packaging facility in the Chinese city of Xian. The investment will also include the acquisition of packaging equipment from a Xian-based subsidiary of Taiwan's Powertech Technology.
Micron stated that the investment plan in China would create an additional 500 jobs, which will bring the company’s total workforce to more than 4,500 in the country.
These investment plans came weeks after the Cyberspace Administration of China imposed a trade restriction on selling Micron products in key domestic industries on national security concerns. In a statement released on May 21, China’s cybersecurity regulator revealed that the U.S.-based memory chipmaker failed to pass a cybersecurity review, which it initiated in late March 2023.
The trade restrictions on Micron chips can be seen as a retaliatory action by the Chinese government against the U.S. government’s increasing restrictions on Chinese access to critical and more advanced semiconductor technology. In October 2022, the United States imposed an export ban on certain advanced chips used in data centers for artificial intelligence, data analytics and computing applications. Over the past few months, Netherlands and Japan also joined the United States to restrict China from making advanced chips.
In May, the company revealed its plan to invest up to 500 billion yen ($3.70 billion) in extreme ultraviolet (EUV) technology over the next few years in Japan. Micron will be the first semiconductor company to bring the state-of-the-art technology to Japan for production. It expects to ramp EUV into production on the 1-gamma node in Taiwan and Japan from 2025 onward.
However, the equivalent actions could jeopardize Micron’s prospects, which are already facing the brunt of the weak demand for its memory chips. Chip sales in China make up approximately 11% of Micron’s total revenues.
In late March, Micron reported weaker-than-expected financial results in the second quarter of fiscal 2023. The company reported a non-GAAP loss of $1.91 per share, which was significantly higher than the Zacks Consensus Estimate of a loss of 67 cents. The bottom line compared unfavorably with the prior-year quarter’s earnings of $2.14 per share.
The quarterly revenues of Micron plunged 53% year over year to $3.69 billion, which missed the consensus mark of $3.76 billion. The rapidly weakening consumer demand and substantial customer inventory adjustments across end markets amid macroeconomic uncertainty were the main reasons behind the dismal quarterly performance.
Zacks Rank & Key Picks
Micron currently carries a Zacks Rank #3 (Hold). Shares of MU have gained 21.4% over the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised downward by 5 cents to $2.82 per share over the past 30 days. For 2023, earnings estimates have moved south by 0.9% to $11.93 in the past 30 days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have climbed 71.6% in the past year.
The Zacks Consensus Estimate for ServiceNow’s second-quarter 2023 earnings has been revised northward by 6.2% to $2.05 per share over the past 60 days. For 2023, earnings estimates have moved up by a penny to $9.59 in the past 30 days.
NOW's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.4%. Shares of the company have inched up 27.4% in the past year.
The Zacks Consensus Estimate for Dropbox’s second-quarter 2023 earnings has been revised southward from 41 cents to 45 cents per share over the past 60 days. For 2023, earnings estimates have moved up by 10.1% to $1.85 in the past 60 days.
DBX's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.4%. Shares of the company have jumped 25.8% in the past year.
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Micron (MU) to Reportedly Make $1 Billion Investment in India
Micron Technology (MU - Free Report) is on the verge of investing at least $1 billion in setting up a chip packaging facility in India, per a recent Bloomberg report. The company is likely to make an announcement this week while India’s prime minister, Narendra Modi, visits the United States, cited some anonymous sources. The Indian prime minister is starting his formal visit to the country on Jun 21.
One of the anonymous persons stated that the amount invested may rise up to $2 billion from $1 billion. Nonetheless, it might also occur that the concerned company does not close the deal. This move is expected to expand Micron’s global footprint amid the ongoing tensions between the United States and China. It would further create an opportunity to strengthen Washington’s key supply chains outside of China.
Last week, Micron promised to invest 4.3 billion yuan ($603 million) over the next few years in its chip packaging plant in China. Per the plan, the semiconductor company will be adding assembly lines at its existing chip packaging facility in the Chinese city of Xian. The investment will also include the acquisition of packaging equipment from a Xian-based subsidiary of Taiwan's Powertech Technology.
Micron Technology, Inc. Price and Consensus
Micron Technology, Inc. price-consensus-chart | Micron Technology, Inc. Quote
Micron stated that the investment plan in China would create an additional 500 jobs, which will bring the company’s total workforce to more than 4,500 in the country.
These investment plans came weeks after the Cyberspace Administration of China imposed a trade restriction on selling Micron products in key domestic industries on national security concerns. In a statement released on May 21, China’s cybersecurity regulator revealed that the U.S.-based memory chipmaker failed to pass a cybersecurity review, which it initiated in late March 2023.
The trade restrictions on Micron chips can be seen as a retaliatory action by the Chinese government against the U.S. government’s increasing restrictions on Chinese access to critical and more advanced semiconductor technology. In October 2022, the United States imposed an export ban on certain advanced chips used in data centers for artificial intelligence, data analytics and computing applications. Over the past few months, Netherlands and Japan also joined the United States to restrict China from making advanced chips.
In May, the company revealed its plan to invest up to 500 billion yen ($3.70 billion) in extreme ultraviolet (EUV) technology over the next few years in Japan. Micron will be the first semiconductor company to bring the state-of-the-art technology to Japan for production. It expects to ramp EUV into production on the 1-gamma node in Taiwan and Japan from 2025 onward.
However, the equivalent actions could jeopardize Micron’s prospects, which are already facing the brunt of the weak demand for its memory chips. Chip sales in China make up approximately 11% of Micron’s total revenues.
In late March, Micron reported weaker-than-expected financial results in the second quarter of fiscal 2023. The company reported a non-GAAP loss of $1.91 per share, which was significantly higher than the Zacks Consensus Estimate of a loss of 67 cents. The bottom line compared unfavorably with the prior-year quarter’s earnings of $2.14 per share.
The quarterly revenues of Micron plunged 53% year over year to $3.69 billion, which missed the consensus mark of $3.76 billion. The rapidly weakening consumer demand and substantial customer inventory adjustments across end markets amid macroeconomic uncertainty were the main reasons behind the dismal quarterly performance.
Zacks Rank & Key Picks
Micron currently carries a Zacks Rank #3 (Hold). Shares of MU have gained 21.4% over the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Meta Platforms (META - Free Report) , ServiceNow (NOW - Free Report) and Dropbox (DBX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised downward by 5 cents to $2.82 per share over the past 30 days. For 2023, earnings estimates have moved south by 0.9% to $11.93 in the past 30 days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have climbed 71.6% in the past year.
The Zacks Consensus Estimate for ServiceNow’s second-quarter 2023 earnings has been revised northward by 6.2% to $2.05 per share over the past 60 days. For 2023, earnings estimates have moved up by a penny to $9.59 in the past 30 days.
NOW's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.4%. Shares of the company have inched up 27.4% in the past year.
The Zacks Consensus Estimate for Dropbox’s second-quarter 2023 earnings has been revised southward from 41 cents to 45 cents per share over the past 60 days. For 2023, earnings estimates have moved up by 10.1% to $1.85 in the past 60 days.
DBX's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.4%. Shares of the company have jumped 25.8% in the past year.