Micron Technology Inc. shares fell more than 4% in premarket trading Tuesday after the memory-chip company said it expects challenging market conditions for the current quarter and the following quarter.
Ahead of an investor presentation that takes place later Tuesday, Micron MU executives stated in a filing that they expect that revenue for the company s fiscal fourth quarter, which ends in August, may come in at or below the low end of the revenue guidance range provided in our June 30 earnings call. In its June earnings report, the company said there would be $6.8 billion to $7.6 billion in revenue.
The executives said in Tuesday s filing that they have recently seen a widening of customer inventory adjustments that have caused the Micron management team to lower their expectations for industry bit demand growth in DRAM and NAND relative to the June 30 earnings call.
The company said in its filing that the market environment in FQ 422 and FQ 123 is challenging.
Micron executives now expect bit shipments to drop off sequentially in the first quarter, and we expect significant sequential declines in revenue and margins. They expect negative free-cash flow in the first quarter.
The company will institute capital-expenditure reductions for wafer-fab equipment in fiscal 2023, adding to the WFE capex reductions discussed in our June 30 earnings call. Executives now expect FY 23 total capex to be down compared to FY 22, according to the filing.
Micron executives are among those at the chip company Nvidia Corp. NVDA, which issued a revenue warning Monday.
Micron executives seemed more optimistic about the long run, despite the more muted view on short-term dynamics, announcing earlier Tuesday that they planned to invest $40 billion in U.S. manufacturing through the end of the decade, tapping grants and credits available through the CHIPS and Science Act.
Chief Executive Sanjay Mehrotra said the company intends to increase domestic memory production from less than 2% of the global market currently to up to 10% within the next decade.
The Nvidia is hit by another hangover, and that isn't the only problem.
Micron's shares fell 9.5% over the past three months, as the S&P 500 SPX has gained 3.7%.