Chip Downturn Nightmare a Memory? Micron's CEO Says Yes.

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Will the nightmare Micron Technology (MU) - Get Report and other chipmakers have been experiencing in terms of sales soon become a distant memory? 

The answer, according to Micron CEO Sanjay Mehrotra, is yes.

Micron in particular has been on a tear this year, with the stock up some 67%, and up more than 10% in December alone, thanks to expectations of a recovery in demand for chips that run computers and smartphone, and stronger general demand for memory devices.

That run could well continue into 2020 as the company begins to see “the cyclical bottom for our financial performance,” Mehrotra said on the company’s post-earnings conference call on Wednesday.

“In DRAM, there has been a strong recovery in the second half of calendar 2019, and our view of calendar 2019 industry-bit demand growth has increased to approximately 20%,” he said.

While sales dropped to $5.14 billion from $7.91 billion in the year-ago quarter, “our base-case assumption, on which all our projections are based, assumes that there are no perturbations to the demand environment due to macroeconomic conditions or trade-related developments.”

Revenue will be as much as $4.8 billion in the fiscal second quarter, Micron said in the statement, above analysts’ current projections of $4.7 billion, according to consensus estimates by FactSet. Adjusted earnings will be 35 cents a share, plus or minus 6 cents, the company said. Analysts are currently expecting per-share earnings of 47 cents.

Micron specializes in DRAM and NAND memory chips. DRAM, or dynamic random access memory, is the type of memory commonly used in PCs and servers, while NAND chips are the flash memory chips used in USB drives and other portable storage devices.