Micron Technology Inc on Wednesday predicted a steeper loss than anticipated in the current quarter, indicating that an industry slump is still weighing on the largest US maker of memory chips.
The company projected a fiscal first-quarter loss of as much as US$1.14 a share, excluding some items. Analysts had estimated a US$0.96 loss. On the bright side, revenue is expected to start recovering in the period. Micron predicted sales of US$4.2 billion to US$4.6 billion, compared with an estimate of US$4.21 billion.
For Micron and competitors Samsung Electronics Co and SK Hynix Inc, this year has been brutal. Customers in their main markets — PCs and smartphones — have slashed orders as they cope with lackluster demand and stockpiles of excess parts.
Photo: Reuters
Micron CEO Sanjay Mehrotra said the firm has taken “decisive actions on supply and cost,” which would help the company as the market for memory chips recovers next year and then reaches record levels again in 2025.
The burden of excess inventory has now lifted and Micron’s customers, apart from those who make data center servers, are ordering at levels that reflect demand for their products, Mehrotra said in an interview. In some areas, devices makers are now increasing the amount of memory and storage put into each product.
Prices for Micron’s products are going up, and the rate of the price jump is increasing, he said.
“This is how we’ll enter 2024,” Mehrotra added.
The company’s latest forecast suggests sales would begin to grow again in the fiscal first quarter, which runs through November.
Yet one additional obstacle that Micron faces is Beijing’s designation of its products as a security risk. That has already cut into the US company’s revenue in China — the largest market for semiconductors — in what management has previously called a “significant headwind.”
Micron expects the industry outlook to brighten considerably by 2025 — especially as artificial intelligence systems demand new types of more expensive memory chips.
In the interim, the outlook remains mixed. In traditional servers — the computers that are still the mainstay of most data centers — demand remains “lackluster,” Mehrotra said.
Personal computers and smartphones should return to growth next year, with units increasing by a percentage in the low to mid-single digits, Micron said.
To cope with the slowdown, Micron and its peers reined in production, severely reducing supply and helping prices bottom out. It expects to be “significantly” below peak output last year for the foreseeable future.
The company plans to continue to run factories at less than full capacity well into next year. Micron would also further reduce spending on new equipment next year.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to