Memory chipmaker Micron Technology predicted first-quarter revenue below Wall Street estimates on Thursday, as demand from key end markets including PCs and smartphones worsened due to rising worries about an economic downturn.
The shares of the Boise, Idaho-based company have declined 45 percent so far this year due to fears of a further slowdown in demand for semiconductors, but fell 2.4 percent in extended trading.
Micron sounded a warning bell for the entire semiconductor industry after its third quarter ended June 2, signaling a demand downturn and over supply of memory chips.
The situation has only worsened since then with the weakness seen from consumer electronics to end markets such as data centers and cloud as a global economic slowdown in China has been caused by rising interest rates, geopolitical tensions and COVID 19 lockdowns.
Spiraling demand has resulted in inventory build ups, which has forced companies to drive down chips prices. 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, according to research firm TrendForce.
The company forecast current-quarter revenue to be $4.25 billion, plus or minus $250 million. According to Refinitiv data, analysts said that the average expected revenue would be $5.62 billion.
Revenue for the quarter ended Sept. 1 was $6.64 billion. The average expected revenue was $6.68 billion, according to analysts.