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Micron (MU) Sued by China's YMTC for Patent Infringement
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Micron Technology (MU - Free Report) has been accused of patent infringement by the Chinese chipmaker, Yangtze Memory Technologies Company (“YMTC”). Partially state-owned, YMTC filed a lawsuit on Nov 9 at the U.S. District Court, alleging that the U.S. memory chipmaker has infringed eight of its patented technology, according to a report by Reuters.
In the lawsuit, Micron has been accused of the unauthorized use of the patented technology to fend off competition from YMTC and protect its market share. This is a fresh salvo to the U.S. chipmaker amid the growing trade war between the United States and China. Earlier in May 2023, the company was imposed a trade restriction by the Cyberspace Administration of China on selling its products in key domestic industries on national security concerns.
Micron Caught in Trade War Crossfire
The developments can be seen as a retaliatory action by the Chinese government against the U.S. government’s increasing restrictions on Chinese access to critical and more advanced semiconductor technology.
Last year, YMTC was placed on the export blacklist by the U.S. government, restricting it from buying certain American components. In October 2022, the United States imposed an export ban on certain advanced chips that are used in data centers for artificial intelligence, data analytics and computing applications.
Just after a year, in October 2023, the U.S. government further expanded restrictions on exporting and selling advanced chips to China from certain American companies. Earlier this year, the Netherlands and Japan also joined the United States to restrict China from making advanced chips.
The tit-for-tat actions could jeopardize Micron’s prospects, which are already facing the brunt of the weak demand for its memory chips. Chip sales in China make up approximately 11% of Micron’s total revenues.
In late September, MU reported a non-GAAP loss of $1.07 per share for the fourth quarter of fiscal 2023, which compared unfavorably with the prior-year quarter’s earnings of $1.45 per share. The quarterly revenues of Micron plunged 39.6% year over year to $4.01 billion. Weak consumer demand and substantial customer inventory adjustments across end markets amid macroeconomic uncertainty were the main reasons behind the drastic year-over-year decline in the quarterly performance.
Zacks Rank & Stocks to Consider
Currently, Micron carries a Zacks Rank #3 (Hold). Shares of MU have rallied 49.6% year to date (YTD).
The Zacks Consensus Estimate for NVDA’s third-quarter fiscal 2024 earnings has been revised by 2 cents northward to $3.34 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 7 cents to $10.74 in the past 60 days.
NVIDIA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing on one occasion, the average surprise being 9.8%. Shares of NVDA have rallied 232.7% year to date.
The Zacks Consensus Estimate for NetEase's third-quarter 2023 earnings has been revised upward by 9 cents to $1.65 per share in the past 30 days. For fiscal 2023, earnings estimates have increased by 42 cents to $6.96 per share in the past 30 days.
NTES' earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing on one occasion, the average surprise being 24.5%. Shares of NTES have rallied 58.5% year to date.
The Zacks Consensus Estimate for Datadog's fourth-quarter 2023 earnings has been revised upward by a penny to 35 cents per share in the past seven days. For 2023, earnings estimates have increased by 3 cents to $1.35 per share in the past seven days.
DDOG’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of Datadog have declined 41.8% year to date.
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Micron (MU) Sued by China's YMTC for Patent Infringement
Micron Technology (MU - Free Report) has been accused of patent infringement by the Chinese chipmaker, Yangtze Memory Technologies Company (“YMTC”). Partially state-owned, YMTC filed a lawsuit on Nov 9 at the U.S. District Court, alleging that the U.S. memory chipmaker has infringed eight of its patented technology, according to a report by Reuters.
In the lawsuit, Micron has been accused of the unauthorized use of the patented technology to fend off competition from YMTC and protect its market share. This is a fresh salvo to the U.S. chipmaker amid the growing trade war between the United States and China. Earlier in May 2023, the company was imposed a trade restriction by the Cyberspace Administration of China on selling its products in key domestic industries on national security concerns.
Micron Caught in Trade War Crossfire
The developments can be seen as a retaliatory action by the Chinese government against the U.S. government’s increasing restrictions on Chinese access to critical and more advanced semiconductor technology.
Micron Technology, Inc. Price and Consensus
Micron Technology, Inc. price-consensus-chart | Micron Technology, Inc. Quote
Last year, YMTC was placed on the export blacklist by the U.S. government, restricting it from buying certain American components. In October 2022, the United States imposed an export ban on certain advanced chips that are used in data centers for artificial intelligence, data analytics and computing applications.
Just after a year, in October 2023, the U.S. government further expanded restrictions on exporting and selling advanced chips to China from certain American companies. Earlier this year, the Netherlands and Japan also joined the United States to restrict China from making advanced chips.
The tit-for-tat actions could jeopardize Micron’s prospects, which are already facing the brunt of the weak demand for its memory chips. Chip sales in China make up approximately 11% of Micron’s total revenues.
In late September, MU reported a non-GAAP loss of $1.07 per share for the fourth quarter of fiscal 2023, which compared unfavorably with the prior-year quarter’s earnings of $1.45 per share. The quarterly revenues of Micron plunged 39.6% year over year to $4.01 billion. Weak consumer demand and substantial customer inventory adjustments across end markets amid macroeconomic uncertainty were the main reasons behind the drastic year-over-year decline in the quarterly performance.
Zacks Rank & Stocks to Consider
Currently, Micron carries a Zacks Rank #3 (Hold). Shares of MU have rallied 49.6% year to date (YTD).
Some better-ranked stocks from the broader technology sector are NVIDIA Corporation (NVDA - Free Report) , NetEase, Inc. (NTES - Free Report) and Datadog, Inc. (DDOG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVDA’s third-quarter fiscal 2024 earnings has been revised by 2 cents northward to $3.34 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 7 cents to $10.74 in the past 60 days.
NVIDIA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing on one occasion, the average surprise being 9.8%. Shares of NVDA have rallied 232.7% year to date.
The Zacks Consensus Estimate for NetEase's third-quarter 2023 earnings has been revised upward by 9 cents to $1.65 per share in the past 30 days. For fiscal 2023, earnings estimates have increased by 42 cents to $6.96 per share in the past 30 days.
NTES' earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing on one occasion, the average surprise being 24.5%. Shares of NTES have rallied 58.5% year to date.
The Zacks Consensus Estimate for Datadog's fourth-quarter 2023 earnings has been revised upward by a penny to 35 cents per share in the past seven days. For 2023, earnings estimates have increased by 3 cents to $1.35 per share in the past seven days.
DDOG’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of Datadog have declined 41.8% year to date.