U.S. memory semiconductor corporations Micron posted a record quarterly performance on the back of rising demand for artificial intelligence (AI). The outlook for the next quarter also far exceeded market expectations.
Micron said on the 24th (local time) that revenue for the fiscal year 2026 third quarter (ended May 28) was $41.456 billion (about 63.8 trillion won). That was a sharp increase from the prior quarter ($23.86 billion) and the same period a year earlier ($9.301 billion).
Net income was $28.243 billion, and adjusted earnings per share (EPS) were $25.11. Cash flow from operating activities was $25.388 billion, more than doubling from the prior quarter.
By business unit, the cloud memory unit posted the highest revenue at $13.769 billion. The core data center unit and the mobile and client unit recorded $11.524 billion and $11.521 billion, respectively. Automotive and embedded unit revenue was $4.634 billion. The gross margin for the core data center unit and the mobile and client unit was 87% each.
Micron shares rose about 10% in after-hours trading immediately after the earnings release.
Micron guided next-quarter revenue to $50 billion (±$1 billion). That is well above the market estimate of $43.58 billion. It projected a gross margin of about 86% and adjusted earnings per share (EPS) of $31 (±$1).
The company said that as the race to expand AI data centers continues, supply and demand for memory such as HBM, DRAM, and NAND flash will remain tight through 2027 and beyond. It also said it signed 16 long-term supply contracts guaranteeing three to five years of volumes with major data center operators and automakers.
With the AI Semiconductor market growing rapidly, memory prices are rising steeply. Large-capacity HBM is essential in AI accelerators from big tech companies such as Nvidia and Google. As data center investment expands and demand for DRAM for AI servers surges, Micron's profitability has also improved significantly.
In fact, Micron's adjusted gross margin was 84.9%, beating the market estimate of 81.9%. In particular, DRAM revenue was $31.3 billion, exceeding the market estimate of $27.5 billion, and NAND flash revenue also came in at $9.9 billion, topping the market forecast of $7.7 billion.
In the product institutional sector, it said it is mass-producing and shipping HBM4 based on the 1β (beta) process for major customer platforms. The next-generation HBM4E is under development with mass production targeted for 2027.
Sanjay Mehrotra, Micron chief executive officer (CEO), said, "Record third-quarter results and an even stronger fourth-quarter outlook demonstrate the strategic importance of memory in the AI era," adding, "We are making the largest investments ever across technology, products, and the supply chain to respond to increasing customer demand."
Meanwhile, Micron's board of directors set a quarterly dividend of $0.15 per share. The dividend is scheduled to be paid on July 21 to shareholders of record as of the close of trading on July 6.