Micron expects Q1 revenue below estimates as demand deteriorates

Sep 29 (Reuters) – Memory chipmaker Micron Technology (MU.O) on Thursday forecast first-quarter revenue below Wall Street estimates as demand from its key end markets, including PCs and smartphones , worsens amid growing concerns about an economic slowdown.

Shares of the Boise, Idaho-based company, which have fallen about 45% so far this year on fears of another slowdown in demand for semiconductors, fell 2. 4% in extended exchanges.

Following its results for the third quarter ended June 2, Micron sounded the alarm for the entire semiconductor industry: pointing to a slowdown in demand and signaling an oversupply of memory chips.

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Since then, the situation has only worsened with weakness seeping from consumer electronics to end markets such as data centers and the cloud, while a global economic slowdown caused by inflation heat, rising interest rates, geopolitical tensions and COVID-19 lockdowns in China have led businesses and consumers to rein in spending.

Soaring demand has led to a buildup of inventory, forcing companies to drive down chip prices. Research firm TrendForce predicts a 13% to 18% drop in the price of DRAM chips, which account for more than 70% of Micron’s revenue, while also predicting a 15% to 20% drop in the price of NAND memory for the last three months of 2022.

The company expects adjusted revenue for the current quarter to be $4.25 billion, plus or minus $250 million. Analysts on average had expected revenue of $5.62 billion, according to Refinitiv data.

Adjusted revenue for the quarter ended Sept. 1 was $6.64 billion. Analysts on average were forecasting revenue of $6.68 billion.

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Reporting by Chavi Mehta in Bengaluru and Jane Lanhee Lee; Editing by Krishna Chandra Eluri

Our standards: The Thomson Reuters Trust Principles.

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