Micron CEO Expects 5G Smartphone Sales to Double in 2021 to 500M Handsets
Micron Technology expects to benefit this year from a double-digit increase in the per-unit content of the DRAM and NAND chips it supplies for 5G smartphones, said CEO Sanjay Mehrotra on a fiscal Q1 investor call Thursday. Micron forecasts a doubling in 5G smartphone unit sales in 2021 to around 500 million handsets globally, he said.
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Q1 mobile revenue was up 3% sequentially from fiscal Q4, “driven by solid execution and improved handset demand," said Mehrotra. Micron experienced a “better-than-expected transition” to other mobile customers of the business lost to Huawei due to the Commerce Department’s export restrictions, he said. That also contributed to “our revenue upside” in mobile for Q1, he said. The quarter ended Dec. 3.
Micron is well positioned “to win in the 5G era with our industry-leading product portfolio,” said the CEO. Mobile demand “remains strong as 5G momentum increases and the mobile market recovers from the impact of the pandemic,” said Chief Financial Officer David Zinsner.
The continued “remote work and learning trend” drove strong notebook and Chromebook PC demand in the quarter, “despite pockets of nonmemory component shortages in the supply chain,” said Mehrotra. “We delivered strong sequential growth in PC DRAM shipments driven by this demand.”
Micron can’t point to “any nonmemory component shortages” in its own supply chain, said Mehrotra. “We're referring more to our customers’ end markets,” he said. “Certain parts” of the tech supply chain are “running tight,” he said. “We continue to monitor those in terms of any impact on our business, as well as work closely with our customers to understand those demand trends.”
The company anticipates “healthy unit growth in the PC market” continuing for 2021, said Mehrotra. Graphics “should continue to benefit from new gaming consoles and from new gaming cards launched in the second half of last year,” he said. “We expect the cloud market to grow at a healthy pace, and enterprise market recovery will be driven by the timing of the broader economic recovery.”
Micron is busy trying to absorb the impact of two unrelated disruptions to its Taiwan DRAM factories in early December, said Mehrotra. The first was a power outage at the Taoyuan facility Dec. 3, the last day of fiscal Q1, he said. The second, a 6.7-magnitude earthquake Dec. 10 off the northeast coast of Taiwan, “was felt at both our Taoyuan and Taichung locations,” he said. The factories are about 90 miles apart.
The investments Micron made the past few years to build “redundancy” and “clean room control” into the facilities “substantially mitigated the impact of these two events,” he said. But the disruptions reduced Micron’s available fiscal Q2 DRAM supply “and negatively influenced our costs in the short term,” he said. Micron anticipates “a vaccine-driven economic recovery combined with secular trends such as 5G adoption” will drive 2021 growth, said CFO Zinsner.