By Dhirendra Tripathi

Investing.com – Micron (NASDAQ:MU) was trading 1.8% lower in Thursday’s premarket trading, as the market reacts negatively to news that it will have to wait until 2024 for a key upgrade to its chipmaking technology.

According to Reuters, the company has stretched out its use of cheaper chipmaking techniques as long as it could but will start using the EUV machines for production in 2024. EUV machines, made by Holland’s ASML, are used to make cutting-edge next gen chips. ASML's lead times for fulfilling orders have lengthened as chipmakers all scramble to upgrade their production to meet burgeoning demand from new technologies.

For the immediate present, Micron continues to perform well, however. Tight demand for laptops, mobile and other electronic devices that use chips made by Micron led it to report revenue and earnings ahead of expectations in the most recent quarter.

For the fiscal third quarter ended June 3, the company posted revenue of $7.42 billion, up by more than a third from $5.44 billion in the same period last year. Adjusted diluted earnings per share more than doubled to $1.88 from 82 cents. Analysts had expected EPS of $1.7 on revenue of $7.2 billion.

Micron makes NAND memory chips that serve the data storage market and DRAM memory chips used in data centers, smartphones and other computing devices.

The company has forecast fourth-quarter revenue to come at $8.2 billion plus or minus $200 million. Analysts on average were expecting an outlook for $7.87 billion, according to IBES data from Refinitiv.

Ahead of the earnings on Wednesday, BMO analysts upgraded the stock to outperform on the expectation that the current situation of demand exceeding supply could last longer and will benefit the memory chipmaker.

Analyst Ambrish Srivastava sees the stock at $110, an upside potential of around 29.4% from the stock’s last close of $84.98.

In a separate announcement, the company said it will sell a plant at Lehi in Utah to Texas Instruments (NASDAQ:TXN) for about $1.5 billion. Of the sale consideration, $900 million will be in cash and $600 million will be in the value of tools it can sell to outsiders or move to its other factories.

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The company took an impairment charge of $435 million because the $900 million in cash was below the book value of the factory, but Chief Business Officer Sumit Sadana told Reuters in an interview that the factory was on track to generate almost $500 million in losses this year because it was underutilized.

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