[Asia Economy Reporter Jeong Hyunjin] U.S. semiconductor company Micron has presented its sales forecast for September to November this year at the lowest level in the past five years. As the memory semiconductor market freezes, there are expectations that a 'shock' in the semiconductor industry will begin. Micron, known as the industry's performance barometer, announced that it will reduce capital expenditures through next year in response to the decline in semiconductor demand, following this year.
According to Bloomberg and others, Micron announced in its earnings report that its sales for the first quarter of fiscal year 2023 (September to November) are expected to be $4.25 billion (approximately 6.1 trillion KRW). The last time Micron recorded sales in the $4 billion range was in the second quarter of fiscal year 2020 (December 2019 to February 2020), about three years ago, and the forecasted sales figure is the lowest in the past five years. Bloomberg reported that this figure is significantly below the market consensus of $6 billion.
Micron is known as the industry's performance barometer because it is one of the first memory semiconductor companies to announce earnings. Micron's results came amid a rapidly freezing memory semiconductor market. Generally, the semiconductor market's third quarter (July to September) is considered the peak season, but this year, due to soaring inflation and recession concerns, the usage of semiconductors in electronic products such as PCs and smartphones, as well as data centers, has significantly decreased, leading to a decline in demand and worsening performance.
Micron stated that it is responding quickly to the market situation of declining demand. Sanjay Mehrotra, Micron's CEO, said that capital expenditures for fiscal year 2023 will decrease by 30%, adding, "The most important thing is to take action, and we have already taken significant actions." He emphasized, "Compared to last year, we are taking measures to reduce supply expansion, such as cutting wafer fab capital expenditures by nearly 50%."
Micron announced that its sales for the fourth quarter of fiscal year 2022 (June to August) were $6.64 billion, down 20% from the same period last year. This marks the third quarter since the first quarter of fiscal year 2022 (September to November 2021) that Micron's sales have declined, and it is the first time in six quarters that sales have fallen to the $6 billion range.
Micron expects the situation to improve in the second half of next year. Mark Murphy, Micron's CFO, assessed, "When looking ahead, macroeconomic uncertainty is high and visibility is low."
Micron's stock price closed at $50.01, down 1.94% that day. Although the stock price fell more than 4% in after-hours trading following the earnings announcement, Bloomberg reported that the stock rebounded after CEO Mehrotra's remarks during the subsequent conference call about the company's swift response.
Micron competes with domestic semiconductor companies in the memory semiconductor market, including DRAM. According to market research firm TrendForce, Micron's market share in the DRAM market was 24.5% as of the second quarter, ranking third behind Samsung Electronics (43.5%) and SK Hynix (27.4%). Micron expanded its market share by 0.7 percentage points in the second quarter this year, narrowing the gap with second-place SK Hynix.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
