There’s warning signs raging across the world in several industries. There were some who may have thought that chipmakers would have been able to escape the global slowdown. This is not the case. Micron has had some bad news for investors. It did not meet expectations and sees that there will be less significant demand in the near term.
Let us take a look at Micron and see what is going on with this chipmaker.
Micron Moderates Expectations
The Idaho based firm witnessed sales rising over 15% and earnings increasing over 30% but it was still not able to meet expectations set by investors. “Recently, the industry demand environment has weakened, and we are taking action to moderate our supply growth in fiscal 2023,” Chief Executive Sanjay Mehrotra noted.
The CEO of the company also noted that consumer spending and confidence is already trending down in China. The US is also seeing lower consumer confidence. This will likely lead to less smartphone sales and other purchases as well.
Due to higher levels of inflation and how that has affected household expenditures. The general macroeconomic environment, and geopolitical tensions have also affected current sales and projected sales as well.
Global consumer weakness is certainly disconcerting but it is a fact to deal with at the present moment.
Investment and Expansion is Still Important for Micron
The good news is that leadership thinks that this company is fortified amid the economic storm that we are in the process of at this current stage.
The Micron CEO has noted that it is important to continue to make investments to have strong diversification when it comes to supply. Micron is a supplier in various markets from data centers to smartphone and the automotive sector and the industrial segment as well.
“We are confident about the long-term secular demand for memory and storage and are well positioned to deliver strong cross-cycle financial performance”, the CEO notes.
The Government Will Need To Support Micron and Other Chipmakers to Stay Competitive
At the same time, while the company can make their respective investments, leaders in this industry are calling on the government to conduct investments and to support chipmakers as they seek to stay competitive with Asia in these key segments.
The reasoning is that if governments overseas are supporting their respective chipmakers, it is critical for the United States to do so as well.
At the present moment, there is a bill that is still in process.
This delay has helped to stall plans by Intel to build out a manufacturing facility in the United States.