Micron Margins to Take ‘Near-Term’ Hit From Tariffs Taking Effect Monday, Says CFO
Micron Technology expects its gross margins to take a “near-term” hit “to the tune of 50 to 100 basis points” from the 10 percent tariffs on $200 billion worth of Chinese imports that take effect Monday and are due to…
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rise to 25 percent Jan. 1 (see 1809180035 and 1809180020), said Chief Financial Officer Dave Zinsner on a Thursday earnings call. Shares fell nearly 8 percent after hours and closed 2.9 percent lower Friday at $44.74. “We are working to gradually mitigate most of the impact from these tariffs over the next three to four quarters,” said Zinsner. “Clearly, tariffs are impacting us,” and reducing Micron’s exposure to the damage “obviously takes some time,” he said. “We have to do some things operationally to get ourselves in a place where it isn’t as impactful, and so, it’ll be a quarter or two probably before we start to see some benefit from the improvement there.” Micron argued unsuccessfully for removing from the Trump administration’s “retaliation list” the tariffs on 8473.30.11 printed circuit assemblies imported to the U.S., which include the “memory modules” it makes at the fab it owns in Xi’an, China.