Micron Technology has not yet obtained new licences needed to sell its memory chips to China’s Huawei Technologies, which will cut its sales over the next two quarters, company executives said on Tuesday.
Boise, Idaho-based Micron, one of the world’s biggest makers of DRAM chips, said it had previously obtained licences from the US government to sell chips for mobile phones and servers from its factories outside the US to Huawei, which has been the target of US restrictions on chip sales since last year.
Huawei accounted for about US$600-million of Micron’s $6.1-billion in sales for the fiscal fourth quarter ended 3 September, or just under 10%.
But a new round of restrictions that took effect in September barred sales of any chip made using US tools or software, which rendered Micron’s earlier licences invalid and halted sales on 14 September.
“The manufacturing equipment in those fabs is obviously from US-based companies,” Micron’s chief business officer, Sumit Sadana, said in an interview. These included Applied Materials and Lam Research.
Sadana said Micron has applied to the US government for new licences to sell to Huawei but does not yet have them and does not know if or when they will be approved. The company is shifting to selling to other smartphone customers but the shift will take until Micron’s fiscal second quarter to complete.
“As soon as we get the licence, we would work with Huawei to determine how we can resurrect the business,” Sadana said.
Micron shares, which were volatile in extended trading, were down 2% at $49.84 after the company disclosed the Huawei hit. — Reported by Akanksha Rana and Stephen Nellis, (c) 2020 Reuters