You are here
Micron yet to obtain new licences to sell to Huawei, pressuring sales
MICRON Technology Inc has not yet obtained new licences needed to sell its memory chips to China's Huawei Technologies Co Ltd, which will cut its sales over the next two quarters, company executives said on Tuesday.
Boise, Idaho-based Micron, one of the world's biggest makers of DRAM chips, said it had previously obtained licences from the US government to sell chips for mobile phones and servers from its factories outside the United States to Huawei, which has been the target of US restrictions on chip sales since last year.
Huawei accounted for about US$600 million of Micron's US$6.06 billion in sales for the fiscal fourth quarter ended Sept 3, or just under 10 per cent. But a new round of restrictions that took effect in September barred sales of any chip made using US tools or software, which rendered Micron's earlier licences invalid and halted sales on Sept 14.
"The manufacturing equipment in those fabs are obviously from US-based companies," said Micron's chief business officer, Sumit Sadana. These included Applied Materials Inc and Lam Research Corp. He said Micron has applied to the US government for new licences to sell to Huawei but does not yet have them and does not know if or when they will be approved. The company is shifting to selling to other smart phone customers but the shift will take until Micron's fiscal second quarter to complete.
"As soon as we get the licence, we would work with Huawei to determine how we can resurrect the business," Mr Sadana said.
Micron shares, which were volatile in extended trading, were down 2 per cent at US$49.84 after the company disclosed the Huawei hit.
Revenue jumped over 24 per cent to US$6.06 billion in the fiscal fourth quarter, beating analysts' estimate of US$5.89 billion, according to IBES data from Refinitiv.
The company expects fiscal first-quarter sales to be US$5.2 billion, plus or minus US$200 million, while analysts on average were expecting US$5.31 billion. Net income attributable to the company rose to US$988 million, or 87 cents per share, in the last quarter, from US$561 million, or 49 cents per share, a year earlier. Excluding items, Micron earned US$1.08 per share, beating analysts' estimates of 99 cents. REUTERS