What's going on?

Micron reported better-than-expected earnings earlier this week, as the chipmaker cashed in thanks to a string of fortunate events.

What does this mean?

Micron makes a lot of its money by selling chips to PC manufacturers, so it was positively gleeful last quarter when they upped their orders, spurred on by more availability of other computer parts. The American memory chip maker doesn�t want all its eggs in the PC basket though, so it�s been pushing into other areas like the automotive industry and data centres. That might just be working: its revenue from those segments jumped by 25% and 70% respectively last quarter versus last year. And what�s more, the mix of strong demand and ongoing shortages meant Micron could charge a higher price for its chips, which helped it grow overall revenue by a better-than-expected 33% last quarter versus the same time last year (tweet this).

Why should I care?

For markets: 2022 is Micron�s year.
Micron needs the boost: its stock was only up 11% so far this year before the results, well behind the 34% rise of an index tracking 30 of the biggest chipmaking firms. But it�s up for the challenge: Micron gave a better-than-expected revenue outlook for this quarter, and it even reckons it can bring in record revenue next year. Investors respected its ambition, and sent Micron�s stock up 9% after the news.

The bigger picture: Chipmakers might be getting ahead of themselves.
Micron�s got big plans: it wants to invest as much as $12 billion into new equipment and plants over the next year. That�s not unusual: a slew of chipmakers have been investing to increase their capacity during the chip shortage, but some analysts have reservations. See, they reckon if the strong demand for chips ends up dropping off � due to an economic slowdown, say � then those chipmakers could find themselves with too many chips. That could send chip prices falling, and do some damage to chipmakers� bottom lines.