US memory chip giant Micron on Tuesday announced further reduction in its memory chip production output.
The memory chipmaker in its earnings report shared with investors for the second quarter of its 2023 fiscal year (December to February) said expect “meaningfully negative for DRAM” in bit supply growth to the previous fiscal year.
Micron said it also expect to produce fewer NAND bits in its 2023 fiscal year compared to its 2022 fiscal year.
This is a more negative forecast for its 2023 fiscal year compared to its statements for the first quarter of the 2023 fiscal year. At the time, Micron said it expected negative for DRAM and up slightly in NAND in terms of bit growth.
Bit growth refers to amount of memory supply that is increased on a bit bases.
For the past couple of years, DRAM enjoyed a bit growth of 20% and NAND 40% annually.
A source directly involved in the memory sector told TheElec that they have never heard of the expression “negative bit growth” in his decades long career.
Use of this expression by Micron reflects how much the memory chip market is suffering from oversupply and high inventory of customers, they added.
Meanwhile, Micron recorded US$3.69 billion in revenue for its fiscal second quarter, a drop of 52% from a year ago. Its quarterly net loss stood at US$2.3 billion, its worst quarterly profit in 20 years __ it reported US$1.94 billion in net loss during the second quarter of its 2003 fiscal year.
Micron Chief Executive Sanjay Mehrotra also made comments during the conference call that could be interpreted as a call for the whole memory industry to lower their memory chip output.
The CEO said that if the entire industry can shift to a negative bit growth, market recovery will be accelerated.
Micron has already made moves to make the bit growth in DRAM and NAND negative, Mehrota said.
Though the CEO didn’t mention its rivals directly, his comments can be indicated as a call for Samsung and SK Hynix to also join it in lowering their respective memory chip output.
On the same day, SK Hynix vice chairman Park Jung-ho also said that the memory chip sector was stuck in a “prisoner’s dilemma”.
So far, Samsung is the only memory chipmaker that hasn’t announced that it will lower its memory chip production output in light of the downturn of the market.
Meanwhile, Micron announced that it plans to spend US$7 billion in facilities this year __ a drop of US$1 billion from the figure it announced in the previous quarter. On an annual basis, it will be a drop of 40% from its 2022 fiscal year. Micron is also planning to layoff 15% of its workforce, an increase from 10% it previously announced. For the third quarter of its 2023 fiscal year, Micron expects a revenue of US$3.7 billion and net loss of US$1.58 per share.