Summary
Micron Technology, Inc. (MU) issued a business conditions update on August 8, 2022, revising its outlook for the remainder of calendar year 2022 and the first quarter of fiscal year 2023. The company cited macroeconomic factors and supply chain constraints leading to broader customer inventory adjustments. This has resulted in a decline in expected industry bit demand growth for both DRAM and NAND, signaling a challenging market environment for the upcoming quarters. Consequently, Micron anticipates its fourth quarter of fiscal year 2022 revenue may fall at or below the low end of its previously provided guidance. Looking ahead to fiscal Q1 2023, the company expects sequential declines in bit shipments, revenue, and margins, with free cash flow projected to be negative. In response to these headwinds, Micron is further reducing its fiscal year 2023 wafer fab equipment (WFE) capital expenditures, now expecting total FY23 capex to be significantly lower than FY22.
Key Highlights
- 1Micron is experiencing a broadening of customer inventory adjustments due to macroeconomic factors and supply chain constraints.
- 2Expected industry bit demand growth for DRAM and NAND in CY22 has been reduced since the June 30 earnings call.
- 3The company anticipates a challenging market environment in FQ4 2022 and FQ1 2023.
- 4FQ4 2022 revenue may be at or below the low end of prior guidance.
- 5FQ1 2023 is expected to see sequential declines in bit shipments, revenue, and margins.
- 6Free cash flow is projected to be negative in FQ1 2023.
- 7Micron is implementing further reductions to its FY23 wafer fab equipment (WFE) capital expenditures, with total FY23 capex expected to be significantly down from FY22.