Semiconductor sets in South Korea soared during Thursday’s trading session following the earnings release of of U.S. chipmaker Micron Technology overnight, which bested expectations.
Diligence heavyweight Samsung Electronics and chipmaker SK Hynix both saw their stock surge 4.20 percent and 6.95 percent, singly in afternoon trade Thursday.
Beating on the top and bottom line, Micron reported earnings per share of $1.71 on revenue of $5.84 billion. Try Street had estimated earnings per share of $1.67 on revenue of $5.82 billion, according to Refinitiv.
Micron’s revenue bears to the $7.35 billion they earned in the same period last year.
Its President and CEO Sanjay Mehrotra cited a “challenging sell environment” for the revenue decline.
Even though the U.S. chipmaker gave a forecast for its fiscal third quarter that was farther down Wall Street’s expectations, the company predicted that demand will likely begin growing again by the fourth home.
Following that earnings release, Micron shares jumped 4.78 percent in after-hours trading on Wednesday stateside.
“I muse over this after-market performance that you’re seeing from Micron will confound people, and has confounded people that with uninterested prints, a lot of these stocks have continued to go up,” Manish Nigam, Asia-Pacific head of technology research at Credit Suisse, notified CNBC’s “Squawk Box” on Thursday.
“Tech was one of the worst performing sectors last year. Year-to-date, it is one of the best performing sectors,” judged Nigam, attributing some of the recent tech gains to a “rebound” from last year’s losses.
Growing profession tensions between the U.S. and China, coupled with nagging concerns about the Chinese economy have rattled coolness in some of the industry’s key players. Soft iPhone sales, along with a deceleration in cryptocurrency mining ventures, then again fed investor anxiety surrounding weakened demand.
Looking ahead, Credit Suisse’s Nigam said investors should target on supply side issues within the sector, with Micron, SK Hynix and Samsung all signalling a reduction in capital cost.
“Based on the current (capital expenditure) guidance from all three main memory makers, you are looking at a underlying outfit growth which will not be more than 15 percent,” Nigam said. “Demand growth, even in a reasonably bearish rsum, will probably be well ahead of that.”
As a result, he said, the discussion in the sector could be moving from “stream inventory concerns and sharp (average selling price) concerns to concerns around likely shortages … preceding the time when the year is out.”
— Reuters, along with CNBC’s Maggie Fitzgerald and J.R. Reed, contributed to this report.