Micron and China

The micro-chip maker Micron warned its investors that the profit for this quarter would be lower than the predicted amount. In addition to this, their stock fell by 9% on Friday. With analysts too optimist with the forecasted profit for this quarter despite correctly predicting its revenue.

Nonetheless, Micron sells a substantial amount of its micro-chips to China. Thus, that means the prevalent trade war proceeding with China and the US, together with America’s ban on its companies’ sales to Huawei puts Micron’s means of Chinese revenue at great risk. 

Whilst Micron’s stock has risen by approximately 50% this year (together with other chipmakers), as a consequence of the frequent emergence of new smartphone on the market allowing for demand and higher product prices increasing profits, together with a vision for a 5G rollout. However, like Ifineon (another European micro-chip maker), investors sold off shares of other global chipmakers on Friday. 

For an iPhone it takes 43 countries and over 200 manufacturers, so if one micro-chip maker is cut loose, it is likely this will have a damaging effect. But all hope may not be lost as micro-chips are used in many technological everyday devices from cars to phones, therefore leading some analysts advocating to buy Micron and other micro-chip maker stocks on Friday as they view this fall as being a promise to an inevitable rise despite the trade war.