Micron reported a drab revenue outlook and said that the slump in the semiconductor industry will continue next year.
Semiconductor chip manufacturer Micron Technology Inc said it would lay off 10% of its workforce in 2023 due to the imbalance between demand and supply in the semiconductor market.
The company forecast a sharper-than-expected fiscal second-quarter loss of 62 cents per share plus or minus 10 cents, much higher than analysts’ estimates for a 30 cents loss per share. It forecast revenue of $3.8 billion, plus or minus $200 million, for the second quarter which was above Wall Street estimates.
Micron’s chief executive officer Sanjay Mehrotra said that the industry is experiencing its worst imbalance between supply and demand in 13 years. “Due to the significant supply-demand mismatch entering calendar 2023, we expect that profitability will remain challenged throughout 2023,” Mehrotra said. As of September 1, Micron had about 48,000 employees worldwide.
In a conference call, post-releasing the results, Mehrotra said that it would be difficult to generate a profit in the memory chip industry in the coming year. He added that customers will move to more healthy inventory levels by about the middle of 2023, and the chipmaker’s revenue will improve in the second half of the year.
Micron said on Wednesday that its investments in fiscal 2023 would be reduced to a figure between $7 billion to $7.5 billion and that it would be “significantly reducing capex” plans in fiscal 2024. It invested $12 billion in fiscal 2022.
The company has suspended share repurchases, is cutting executive salaries and will skip companywide bonus payments, in addition to its planned workforce layoffs. The company said that it would slow down the introduction of more advanced manufacturing techniques and reduce the overall industry spending on new production.
Micron Technology, Inc. is a provider of memory and storage solutions. Its product portfolio includes graphics and high bandwidth memory (HBM), dynamic random-access memory (DRAM), negative-AND (NAND), three-dimensional (3D) XPoint memory, NOR, solid-state drives, managed NAND and multichip packages.
