Even though Micron Technology is getting ready to scale up manufacturing of new product lines and stated that it was aiming to become a supplier to Nvidia, the company estimated a larger than anticipated first-quarter loss, and its shares fell 2.4%.

The fast expanding artificial intelligence industry helped the Idaho-based chipmaker’s first-quarter sales prediction surpass Wall Street projections. This was due to demand for its memory chips.

In order to certify its most recent high-bandwidth memory chips for usage in Nvidia’s processing chips, Micron says it is collaborating with Nvidia, the most valuable semiconductor manufacturer in the world.

Investor optimism about Micron’s ability to withstand a sluggish recovery in other end markets has also grown due to the market’s need for high-bandwidth memory chips, which is being driven by Nvidia supplier SK Hynix.

During a conference call with investors, Sanjay Mehrotra, the chief executive of Micron, stated that the company anticipates “several hundred million” dollars in revenue from its new high-bandwidth chips in 2019. In the second half of its fiscal 2024, the company anticipates that its gross margins will turn positive once more.

According to Sumit Sadana, chief business officer of Micron, the company essentially avoided the current generation of high-bandwidth chips in favour of a wager that it would make money by selling better performing chips starting next year.

“We have samples in the hands of customers, that compared to samples from our competitors, blow away everyone,” Sadana said. “In fact, the power consumption is so much lower for higher performance that some of our customers didn’t believe the data till they actually tested it out.”

In comparison to projections of $4.20 billion, Micron predicts adjusted sales of $4.40 billion, plus or minus $200 million, for the current quarter.

In comparison to analyst forecasts of a 95 cent loss per share, the business projected an adjusted loss per share of $1.07, which was higher.

In contrast to expectations of $3.91 billion, actual revenue for the fourth quarter came in at $4.01 billion.

(Adapted from EconomicTimes.com)