Micron Technology Inc., the largest US memory-chip maker, predicted a worse loss than feared in the current quarter, indicating that a slump will drag on further.
(Bloomberg) — Micron Technology Inc., the largest US memory-chip maker, predicted a worse loss than feared in the current quarter, indicating that a slump will drag on further.
The company predicted a fiscal first-quarter loss of as much as $1.14 a share, excluding some items. Analysts had predicted a 96-cent loss. The shares fell about 2% in extended trading.
For Micron and its competitors, Samsung Electronics Co. and SK Hynix Inc., 2023 has been a brutal year. Customers in their main markets — personal computers and smartphones — have slashed orders as they cope with lackluster demand and stockpiles of excess parts. Wednesday’s report is a further blow and suggests that investor optimism about a rebound may be premature.
The shares had closed at $68.21 in New York, leaving them up 36% this year.
One additional obstacle that Micron faces is Beijing’s designation of its products as a security risk. That’s already cut into the US company’s revenue in China — the largest market for semiconductors — in what management has called a “significant headwind.”
Read More: Micron Vows $600 Million China Investment Weeks After Chip Ban
Micron’s chips, which help store information in computing devices, are particularly vulnerable to swings in demand because memory products are directly interchangeable and traded like commodities. Rapid fluctuations in the balance between supply and demand can leave producers selling the components for less than they cost to make.
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