Micron Technology reported fiscal fourth quarter 2022 earnings results that will not do much to improve the mood of a semiconductor industry that continues to be battered by a variety of macro-economic factors.
The company late Thursday posted revenue for the fiscal fourth quarter of $6.64 billion. That figure represents a decline both sequentially and year-over-year, as Micron registered $8.64 billion in the fiscal third quarter and $8.27 billion for the fiscal fourth quarter of last year.
More concerning was the company’s outlook for its fiscal first quarter of 2023, when it expects to post about $4.25 billion in revenue, a figure well under the average analyst estimate of about $5.62 billion, according to published reports.
Micron President and CEO Sanjay Mehrotra said the memory market is being hit particularly hard by negative macro trends.
“An unprecedented confluence of events has affected overall demand, including COVID-related lockdowns in China, the Ukraine war, the inflationary environment impacting consumer spending, and the macroeconomic environment influencing customers’ buying behavior in multiple segments,” he said. “In addition, inventory adjustments at customers across all end markets are also contributing to demand weakness. These factors are depressing demand for DRAM and NAND to well below end market consumption levels. We are also seeing an extremely aggressive pricing environment.”
On the bright side, the fourth quarter woes did not stop Micron from generating record full-year revenue of $30.76 billion, an increase from the $27.71 billion total for the full fiscal year of 2021.
Looking forward, despite the soft guidance for Q1 Micron does see potential for an improving market in the long term. “Given the elevated supplier inventories entering calendar 2023, we expect industry profitability to remain challenging in 2023,” Mehotra said. “Following a weak first half of fiscal 2023, we expect strong revenue growth in the second half of fiscal 2023 as bit demand rebounds, following substantial improvement in customer inventories.”
He continued, “Projections for long-term demand trends remain strong across multiple end markets. We expect long-term DRAM bit growth to be in the mid-teens percentage, slightly lower than our prior expectation of mid-to-high teens due to a moderation in expectation of long-term PC unit sales. We continue to expect the NAND market, which benefits from elasticity, to grow around 28% over the long term.”