Micron kicks off dividend payments, shifts to ‘opportunistic’ share buybacks By Reuters

© Reuters. Micron Expertise’s solid-state drive for knowledge heart prospects is offered at a product launch occasion in San Francisco, U.S., October 24, 2019. REUTERS/Stephen Nellis/Recordsdata

By Stephen Nellis

(Reuters) – Reminiscence chip maker Micron Expertise Inc (NASDAQ:) on Monday stated it will shift the way it returns money to shareholders, shopping for up extra shares when costs are low, fewer when costs are excessive and instituting a dividend for the primary time.

Micron makes DRAM and NAND reminiscence chips, that are wanted for practically all computing programs and whose value can fluctuate extensively primarily based on international provide and demand. This will trigger swings in earnings – and share costs – at most reminiscence makers.

Micron on Monday stated it will begin adjusting its beforehand common share repurchases – which have returned about $4 billion in money to shareholders since 2018 – to match these cycles, holding again when costs are excessive in order that it might probably retire extra shares for every greenback spent.

“We’re altering our buyback technique to be extra opportunistic,” Micron Chief Monetary Officer David Zinsner stated throughout a convention name saying the information.

Micron on Monday additionally declared an preliminary quarterly dividend of 10 cents per share, payable in money on Oct. 18.

Capital return applications could be robust for reminiscence corporations to handle in the course of the trade’s boom-and-bust cycles.

Micron’s largest two rivals for reminiscence chips – Samsung Electronics (OTC:) Co Ltd and SK Hynix Inc – each pay dividends to shareholders. Hynix reduce its dividend in 2019 when earnings plummeted on the backside of an trade cycle.

Micron’s adjustments to its capital return program come as the corporate is getting ready to ramp up spending for a brand new technology of chips.

Micron in June stated its capital expenditures for fiscal 2021 would rise above $9.5 billion, partly pushed by pre-payments because it begins to accumulate excessive ultraviolet lithography (EUV) machines from Dutch maker ASML Holding (NASDAQ:) NV. The machines are crucial for making essentially the most cutting-edge chips however can price greater than $100 million every.

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