Micron Guides to Record High Gross Margin of 86%
Micron Technology (NASDAQ: MU) has guided for a fiscal fourth-quarter gross margin of approximately 86%, significantly higher than historical industry benchmarks. This would mark the highest level in the company's history and far exceed previous peaks, such as its prior high of 61% during the memory boom in 2018. The surge is attributed to strong demand from artificial intelligence data centers outpacing supply growth, which has driven up chip prices. However, Micron’s management expects a moderation in price increases for Q4 compared to recent quarters. The company attributes its ability to maintain high margins this time around to long-term customer contracts with fixed pricing or floors. Historically, memory industry profits have been volatile and prone to sharp declines after peaks. Analysts are watching closely whether the current cycle will follow a similar pattern once demand slows.
Tickers: $MU
Topics: AI demand gross margin memory chips Micron Technology