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Almost every analyst on Wall Street knew that the memory chip company
Micron
Technology was likely to provide quarterly guidance below previous Street estimates.
And that’s exactly what happened. Micron’s revenue outlook for the August quarter came in almost $2 billion below the old consensus level.
Micron shares are trading sharply lower on Friday, down 6% to $52.02 after hitting a 52-week low earlier in the session. The stock’s tumble triggered broad declines in chip and semiconductor equipment stocks—apparently, the outlook was even worse than feared.
For the August quarter, Micron is projecting revenue of $7.2 billion, with non-GAAP profits of $1.63 a share. The Street had been looking for $9.1 billion of revenue and non-GAAP profits of $2.62 a share. The company called out softening PC and smartphone sales as the primary problem. Micron now sees global calendar 2022 PC units down 10% from 2021; they’d previously expected flat sales. For smartphones, Micron now sees unit sales down in the mid-single digits; their old view called for percentage growth in the mid-single digits.
In particular, the company called out much-weaker-than-expected consumer demand in China—Micron Chief Business Officer Sumit Sadana said in an interview that Micron’s revised view for August quarter shipments to China are down 30% from their forecast just one quarter earlier.
Micron’s stark warning has triggered widespread selling of other chip and equipment stocks, with the
SOX
,
the widely tracked semiconductor index, down 4.6%. Among other large-cap chip shares,
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