Micron Technology Inc., the largest U.S. maker of memory chips, also reported profits for the last quarter that exceeded analysts' estimates as limited supply industrywide bolstered prices.
Net income rose to $806 million, or 68 cents a share, from $43 million, or 4 cents, a year earlier, the company said Monday in a statement. Revenue in the three months ended May 29 climbed 72 percent to $3.98 billion. Analysts on average had projected earnings of 61 cents a share on sales of $3.9 billion.
After years of losses in a market where prices fluctuated with unsteady supply and demand, the company has bought out competitors to help balance the industry and prevent gluts. This year, Micron and rivals such as Samsung Electronics Co. are also benefiting from more corporate demand for computers, giving prices a further boost.
"The bigger picture is all about supply constraints," said Mark Newman, an analyst at Sanford C. Bernstein. Newman said that prices are gaining for both computer memory and chips used as storage in mobile phones and tablets.
Micron is enjoying newfound stability, said Mike Howard, a semiconductor analyst in Boise for IHS iSuppli and a former Micron employee. The firm reported numbers near its internal projections for two straight quarters, he said, allowing for trust in its planning.
"It was a pleasantly humdrum quarter," Howard said. "People in memory love for things to be humdrum because it's historically rubber-banded so much that you couldn't plan what you'd spend next year."
Micron's stock, up 44 percent this year, traded as high as $32 in extended trading following the afternoon announcement. It had earlier declined 1.9 percent to $31.26 at the close in New York.
Micron is reporting earnings less than two weeks after Intel Corp., the world's largest chip maker, raised projection for second-quarter revenue on stronger demand for corporate personal computers. The forecast bolstered optimism for results at other PC-related companies.
Micron also announced Monday a partnership with Intel to produce components for Intel's "Knights Landing" high-end server processors, which are scheduled for release in the coming months. The new processors will be among the fastest and most energy efficient, Micron said.
Howard said the Knights Landing news won't shake the industry like when Micron bought competitor Elpida Memory Inc. last year. However, being the sole supplier for an industry giant can only help Micron in the long run, especially if Knights Landing chips find homes in more affordable systems, he said.
"I can absolutely see this technology filtering down to chips you find in a laptop," Howard said.
Micron is the only remaining U.S. manufacturer of dynamic random-access memory chips, or DRAM, semiconductors that provide the main memory in PCs. The purchase of Japanese rival Elpida gave Micron a bigger chunk of the DRAM market and a greater return on its technology investments.
Acquiring Elpida limited the number of chip makers building new plants and curtailed most of the industry's output to three companies: Samsung Electronics Co., SK Hynix Inc. and Micron.
Micron's other main business is producing and selling Nand flash chips. While prices in that market vary based on demand for tablets and phones, Nand is increasingly finding its way into storage for computers, replacing spinning magnetic disks. Nand chips sold for these solid state drives are more expensive than those for mobile devices.
Zach Kyle: 377-6464,Twitter: @IDS_zachkyle