In order to speak about this subject, many memory makers have now walked away with a difficult time and only Micron Technology has the opportunity to speak now. There have just been a quarterly report for the first quarter. The sales fell by 77 %, the net losses reached 195 million, the capital expenditures will need to be cut and staff will be reduced by 10 %. Micron doesn’t count on any quick improvement in the situation.
Micron Technology, Image Source.
On the first of December, the first quarter of 2023 ended in the Micron Technology calendar. Three months ago, the company had nearly 48.8 employees and now they have to reduce the number of people that are employed by 20 to 10 cents. Changes in incoming salaries will be made to five % and bonuses will stop fading. Last month, the company announced plans to reduce the number of silicon wafers it processes every month by 20 %. In this fashion, Micron enterprises continue to operate indefinitely, until the situation with the need for memory recovers.
As demand grew, memory chips were bought from the start of the year from 2020 until 2022. Since the combination of unfavorable factors gave it a break in the last three years, the gap between supply and demand reached the maximum value of 13 years. The inventories will climb to the peak of the current quarter and then get started to decline. Micron management expects to start growing revenue from March 2023, with increasing customer inventory normalizing from mid-2023. All that does not allow Micron to take account of rapid return to profitability, and all the years 2023 will be difficult from this point of view.
When the crisis in the industry is overcome, according to the CEO of Sanjay Mehrotra, the locomotive of profit for memory manufacturers is to the segments of artificial intelligence and industrial automation. Micron expects to give up capital expenditures to $7 billion per year, in comparison to the previously planned eight billion and the $12 billion spent in fiscal year 2022. The cost of production is more than just a halve. Even the fiscal year 2024, they will be higher than 2023. Micron is going to need to slow its process migration and to adopt EUV lithography because of new market conditions. In the past quarter, the company’s capital expenditures totaled $2.47 billion.
Memory demand in the server segment is going to remain below historical levels until 2023. The total capacity of the PC market will fall by 1819% in the future and by another 25 % in the next half of all. According to Micron, this market will return to 2024 as expected. This is contrary to the predicted predictions from many market participants. Because the pandemic has brought the PC market to a new level of demand, and one can only restrain the future. The smartphone memory segment will reduce by ten percent this year and it will remain flat or grow slightly next year if demand grows on the Chinese market.
The automotive segment showed a 30% increase in memory demand last quarter; even if macroeconomic uncertainty persists, it could show noticeable growth by 2023. In the current calendar year, the demand for DRAM and NAND memory chips will increase by two-five %. Next year it will grow by 10% in the first case and by 20% in the second. On the other hand, the demand for memory remains below historical trends for two years in the same row, as the influence of regional geopolitical factors in Europe and China will be added to the elusive macroeconomic environment.
The company’s revenue was $4.09 billion last quarter, down 47% from the same period last year, and 38% less than the last quarter’s revenues. The return rate did not match our own prediction, dropping to 22,9% when the target was 26.6%. The company finished the quarter with $1.8 billion in cash. Loses estimate $195 million on a GAAP basis and $339 million on non-GAAP basis. In the first case, profits reached 209 million dollars and in the second. In the current fiscal quarter, Micron expects to earn a total of 3,6 and 4 yen dollars. The financial statements are decreasing, after the closure of the main trading session, the company’s share price. In total, since the beginning of the year, Micron shares have fallen by 45%.
When you notice a mistake, select it with the mouse and press CRL + ENTER.