Micron Technology Inc., the largest U.S. maker of memory chips, gave a lackluster revenue outlook for the current period and said it will reduce its workforce by about 10 per cent over the next year.
Sales will be about US$3.8 billion in the fiscal second quarter, Micron said Wednesday in a statement. That compares with analysts’ average estimate of US$3.88 billion, according to data compiled by Bloomberg. The company projected a loss of about 62 cents a share, excluding certain items, in the period ending in February, compared with a loss of 29 cents expected by analysts.
The industry is experiencing its worst imbalance between supply and demand in 13 years, according to Chief Executive Officer Sanjay Mehrotra. Inventory should peak in the current period, then decline the rest of the year, he said. 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, Mehrotra said on a conference call after the results were released.
Unlike other parts of the chip sector, products from Micron are built to industry standards, meaning they can be swapped out for those of its competitors. Because memory can be traded like a commodity, its makers are exposed to more pronounced price swings. It will be difficult to generate a profit in the memory chip industry in the coming year, Mehrotra said. In addition to its planned workforce reductions, the company has suspended share repurchases, is cutting executive salaries and will skip companywide bonus payments, executives said on the call.
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