Micron Technology (MU) said Wednesday that it is slashing production of memory chips, citing weak demand. The news pulled down semiconductor stocks broadly.
The Boise, Idaho-based company said it is reducing its wafer starts for DRAM and Nand memory chips by about 20% in the current quarter vs. the same period last year. Micron also is planning additional cuts to its capital expenditures, according to a news release.
In calendar 2023, Micron now expects its year-on-year bit supply growth to be negative for DRAM, and in the single-digit percentage range for Nand. DRAM chips act as the main memory in PCs, servers and other devices, working closely with central processing units. Nand flash provides longer-term data storage.
“Micron is taking bold and aggressive steps to reduce bit supply growth to limit the size of our inventory,” Chief Executive Sanjay Mehrotra said in a written statement.
Semiconductor Stock Tumble
He added, “Despite the near-term cyclical challenges, we remain confident in the secular demand drivers for our markets, and in the long term, expect memory and storage revenue growth to outpace that of the rest of the semiconductor industry.”
In morning trades on the stock market today, Micron stock fell 5% to 59.92.
Meanwhile, the Philadelphia semiconductor index, known as SOX, dropped 3.7% on Wednesday. The SOX includes the 30 largest semiconductor stocks traded in the U.S.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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