Memory chipmaker Micron Technology forecast first-quarter revenue below Wall Street estimates on Thursday as demand from its key end markets including PCs and smartphones worsen amid rising worries about an economic downturn.
Shares of the Boise, Idaho-based company, which have roughly declined 45 per cent so far this year on fears of a further slowdown in demand for semiconductors, fell 2.4 per cent in extended trading.
Following its results for the third quarter ended June 2, Micron sounded a warning bell for the entire semiconductor industry: indicating a demand downturn and signaling over supply of memory chips.
Since then, the situation has only worsened with the weakness seeping from consumer electronics to end markets such as data centers and cloud as a global economic slowdown caused by red-hot inflation, rising interest rates, geopolitical tensions and Covid-19 lockdowns in China has led businesses and consumers alike to rein in expenses.
Spiraling demand had led to inventory build ups, which in turn has forced companies to drive down the prices of chips. Research firm TrendForce forecast a 13 per cent to 18 per cent drop in DRAM chips pricing, which makes over 70 per cent of Micron's revenue, while also forecasting a 15 per cent to 20 per cent drop in NAND memory pricing for the last three months of 2022.
The company forecast adjusted current-quarter revenue to be $4.25 billion, plus or minus $250 million. Analysts on average expected revenue to be $5.62 billion, according Refinitiv data.
Adjusted revenue for the quarter ended Sept. 1 was $6.64 billion. Analysts on average expected revenue to be $6.68 billion.