MU - Micron's Profit-Killing Downturn Isn't Over Yet
2023-10-04 07:00:00 ET
The tide is finally starting to turn in the memory chip markets. Production cuts across major suppliers of DRAM and NAND chips have helped whittle away the excess inventories held by customers. Micron (NASDAQ: MU) has been aggressive in reducing output, and it expects its wafer starts for both DRAM and NAND to be "significantly below" 2022 levels for the foreseeable future.
Average selling prices still declined for Micron in its fiscal fourth quarter, which ended on Aug. 31. DRAM prices were down a high single-digit percentage, while NAND prices were down a mid-teens percentage. But demand seems to have bottomed out. Micron boosted shipments of DRAM by a mid-teens percentage compared to the previous quarter, while NAND shipments soared 40%. Micron's revenue was down compared to the prior-year period, but it edged up 7% from the previous quarter.
While Micron is making progress, it's clear from the company's guidance that a return to solid profitability is still a ways off.
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Micron's Profit-Killing Downturn Isn't Over Yet