[Edaily Reporter KIM YOON JI ] U.S. memory semiconductor maker Micron reported earnings that exceeded market expectations, driven by demand for artificial intelligence (AI), but its stock price fell. Although the outlook for next quarter’s revenue and net income was optimistic, investor sentiment was dampened by forecasts of declining profit margins due to an expansion of employee performance bonuses.
Following its earnings announcement on the 30th (local time), Micron’s stock price fell by less than 1% in after-hours trading. The outlook for gross margin—the ratio of profit to revenue—proved to be a drag. Micron projected an adjusted gross margin of 86.3% for the next quarter. This is lower than the 87% recorded in the previous quarter and falls short of the market consensus of 86.7%. Although the company has been recording historically high gross profit margins, it projected that this figure would decline slightly in the first quarter of the fiscal year due to factors such as wage increases.
Mark Murphy, Chief Financial Officer (CFO), explained during the earnings call, “We decided to increase incentive compensation,” adding, “The expansion of employee compensation is the biggest factor affecting this margin forecast.”
The company remains optimistic about memory demand. While orders for HBM—used in AI computing—are rising, the production capacity of SamsungElectronics, SK hynix, and Micron is struggling to keep up with demand. The expansion of HBM production is also putting pressure on the supply of general-purpose memory used in laptops and gaming consoles.
CEO Sanjay Mehrotra stated, “We achieved record-breaking results in fiscal year 2026 and expect even stronger performance in fiscal year 2027.” He noted that memory “enhances the intelligence and competitiveness of our customers’ platforms.” While expanding production capacity, Micron is also increasing long-term supply contracts to reduce the volatility of the memory business, which has historically been subject to recurring cycles of boom and bust.