The chipmaker’s disappointing launch still leaves some questions about the health of the memory market
Now the question is whether all the bad news is over. Shares of Micron fell a further 2% on Wednesday morning. The company acknowledged on its earnings call Tuesday that PC makers are beginning to cut memory orders specifically, as a lack of other components hampers their production output. Those reductions are also directly affecting the micron; Chief executive Sanjay Mehrotra said the inability to procure adequate controllers and analog chips would hamper some of Micron’s production in the current quarter.
But Micron is still more optimistic than others in key segments of the market. Mr Mehrotra said the inventory levels in the data-center segment are in “decent shape”. But market research firm Trendforce predicted last week that server DRAM prices would drop 5% in the calendar’s fourth quarter, as the cloud provider had “massively” over the past few quarters to outweigh any production shortfalls. are buying. . Morgan Stanley’s Joseph Moore said that even if cloud providers don’t start reducing that inventory, they can use their reserves “as a lever in price negotiations.”
Still, most of Wall Street is positive on Micron, with about 85% of analysts rating the stock as a buy. At about 8 times forward earnings, the shares are cheap relative to peers and their own history over the past two years. Micron also said it expects record revenue in fiscal 2022 — meaning growth of at least 10% from the recently ended year. But more clarity on DRAM pricing trends may be needed for the stock to work again. Even chip makers are not safe from chip shortages.
Dan Gallagher [email protected] . Feather