Orders for Micron Technology Inc's (MU.O) NAND memory chips are holding up despite growing economic uncertainty, thanks to strong demand from manufacturers making tablets and solid-state drives, a senior executive at the chipmaker said.
Glen Hawk, vice president of NAND Solutions at the top U.S. maker of memory chips for computers and mobile gadgets, said it was too soon to know whether Standard & Poor's downgrade of U.S. sovereign debt on Friday and increased financial troubles in Europe would hurt demand.
"We haven't seen any effects in a week, but yes, people are going to be conservative about spending money and we're absolutely mindful of that," he told Reuters at an industry event on Tuesday.
Persistently high U.S. unemployment and the danger of a European financial crisis have depressed many electronics manufacturers at a time of year when they are normally busy preparing for the brisk back-to-school season.
Micron also makes DRAM chips used in personal computers, whose sales have been crimped in the United States and Europe by economic worries and the growing popularity of tablets.
Demand for chips used in consumer electronics like TVs, game consoles and cameras is expected to be less than normal this back-to-school season, although purchases of Apple Inc's (AAPL.O) iPad are expected to remain strong.
The red-hot success of the iPad and iPhone have made Apple a top consumer of NAND chips, driving manufacturers to increase their capacity.
Corporate IT managers are also increasingly replacing hard disk drives with NAND chips in the form of solid-state drives (SSDs) to speed up their data centers.
"I wouldn't characterize the NAND side of things as slower than seasonal," Hawk said. "There are two segments offsetting any other economic weakness. That's the tablet explosion and also the adoption of SSDs is absolutely increasing."