In the latest financial report disclosed by Micron Technology recently, revenue in the fourth fiscal quarter (June-August 2022) fell by about 20% year-on-year; net profit fell sharply by 45%. Micron executives said capital spending in fiscal 2023 is expected to fall by 30% as customers across industries cut chip orders, and it will cut investment in chip packaging equipment by 50%. At the same time, the capital market is also very pessimistic. The stock price of Micron Technology has fallen by 46% during the year, and the total market value has evaporated by more than 47.1 billion US dollars.
Micron said it was moving quickly to address the drop in demand. These include slowing production at existing factories and cutting machine budgets. Micron has slashed capital expenditures before and now expects capital expenditures in fiscal 2023 to be $8 billion, down 30% from the previous fiscal year. Among them, Micron will cut its investment in chip packaging equipment in half in fiscal 2023.
South Korea, an important producer of the global chip industry, is also not optimistic. On September 30, local time, the latest data released by Statistics Korea showed that chip production and shipments in August 2022 fell by 1.7% and 20.4% year-on-year, respectively, which is relatively rare. Moreover, South Korea’s chip inventory in August surged year-on-year. Over 67%. Some analysts said that South Korea’s three indicators sounded the alarm meaning that the global economy is in a downturn, and chipmakers are preparing for a slowdown in global demand. In particular, the demand for electronic products, the main driver of South Korea’s economic growth, has cooled significantly. The Financial Times reported that Washington in the United States is using the $52 billion in appropriations listed in the Chip and Science Act to lure global chipmakers to expand production in the United States. South Korea’s Minister of Science and Technology, chip expert Li Zonghao warned: a sense of crisis has enveloped South Korea’s chip industry.
In this regard, the “Financial Times” pointed out that the South Korean authorities hope to create a large “chip cluster”, gather production and research, and development strength, and attract foreign chip manufacturers to South Korea.
Micron CFO Mark Murphy expects that the situation may improve starting in May next year, and the global memory chip market demand will recover. In the second half of fiscal 2023, most chip makers are expected to report strong revenue growth.
Post time: Oct-19-2022