By Sonam Rai and Stephen Nellis
(Reuters) – U.S. chipmaker Micron Technology Inc (O:MU) gave on Tuesday quarterly sales and profit forecasts well below Wall Street estimates, citing a market glut of memory chips as consumer and business demand for phones and computers is weakening.
Micron said it expected industry output, including from South Korean rivals Samsung Electronics Co Ltd (KS:005930) and SK Hynix (KS:000660), to outstrip demand from the makers of phones, PCs and servers, pushing down Micron chip prices.
Samsung had already warned of a slowdown in demand and drop in chip prices, flagging an end to a two-year boom in memory chips as global demand for mobile and other electronics devices wanes and fresh supplies from Hynix and Toshiba Corp (T:6502) hit the market. Hynix has also offered a downbeat outlook.
Micron Chief Executive Sanjay Mehrotra told investors on a conference call on Tuesday that the company was taking “decisive actions in terms of reducing our production output” to hold the line on prices.
“We are always reviewing how to best align our output with market demand to focus on delivering healthy profitability,” Mehrotra said in an interview.
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