On 18th December 2019, Micron Technology Inc stated that it is expecting a recovery after a “cyclical bottom” in the second quarter earlier this year. The primary reasons for its projected recovery in the arriving year are due to the company receiving all requested licenses to supply its products to its biggest client, Huawei.
Micron was facing stagnancy in its growth in the memory market from the beginning of the year. However, the main blow arrived when its largest customer got placed on the Entity List. Huawei, the smartphone manufacturer, was banned from the US Commerce Department in early 2019 which had led many US based companies to cut their business ties with it.
A few of those include Google with its Android OS platform, ARM with its chipset architecture and even Micron Technology for its memory-based chips. Initially, when the US Government imposed the ban on Huawei, many American companies had also been against the move since they had heavily relied on the Chinese tech giant.
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Since Huawei is also one of the leading telecom companies that supply advanced 5G networking infrastructure; a few of the local telecom companies also suffered when the ban was imposed. All of this points to a domino effect that spans multiple corporations if a key player in the market gets affected.
According to the Chief Executive of Micron, Sanjay Mehrotra, the company is expecting business to recover by the third quarter of 2020. The recovery is made possible by the licenses to work with Huawei being granted after the declining performance in Q2 2019. In June, Micron had also stated that it could legally ship some of its products to Huawei even during the ban was enforced. Although whether the company received the license when the US Government began granting them in November is still unknown.
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(Via)
