Micron Sees Declining Demand For Chips As PC Makers Face Parts Shortage

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Micron Technology’s SSD for data center customers is showcased at a product launch event in San Francisco, USA, October 24, 2019. REUTERS / Stephen Nellis / File Photo

Sept. 28 (Reuters) – Micron Technology Inc (MU.O) forecasts current quarter revenue lower than analysts’ expectations and warned that shipments of its memory chips will decline in the near term as its personal computer customers are faced with a shortage of other parts. .

Shares of supplier Apple Inc (AAPL.O), which also said it was experiencing shortages within its own supply chain for some components, fell nearly 4% in extended trading on Tuesday.

The company manufactures both NAND memory chips which serve the data storage market and DRAM memory chips which are widely used in data centers, personal computers and other devices.

Micron, one of the world’s largest suppliers of memory chips, said it expects shipments of both chips to gradually decrease in the near term.

“Some PC customers are adjusting their memory and storage purchases due to the shortage of non-memory components needed to pay PC bills,” Managing Director Sanjay Mehrotra told analysts.

“We expect this adjustment for our PC customers to be largely resolved in the coming months.”

Analysts, however, questioned whether this was a “slowdown or the start of a period of prolonged weakness.”

The question around Micron is whether the memory industry is entering a prolonged downturn or experiencing a more modest drop in demand that will correct itself relatively quickly, Wedbush analyst Matthew Bryson said.

While Micron’s comments support the latter view, Bryson said he was waiting for more concrete data to back up this result.

Micron is forecasting $ 7.65 billion in revenue for the current quarter, plus or minus $ 200 million, while analysts on average expected $ 8.57 billion, according to IBES data from Refinitiv.

The company also forecast adjusted earnings per share of $ 2.10, plus or minus 10 cents, with missing estimates of $ 2.33 per share.

In the fourth quarter ended Sept. 2, Micron earned $ 2.42 per share on an adjusted basis, beating the average analyst estimate of $ 2.33 per share.

Reporting by Tiyashi Datta and Manas Mishra in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli

Our standards: Thomson Reuters Trust Principles.


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