Micron sees dip in chip demand as PC makers face parts shortages

Micron Technology warned that shipments for its memory chips are set to dip in the near term as its customers making personal computers face shortages of other parts.
Micron Technology uMCP5
The US-based Apple supplier also said it was experiencing shortages within its own supply chain for some components.

Micron makes both NAND memory chips that serve the data storage market and DRAM memory chips that are widely used in data centers, personal computers and other devices.

Micron, one of the world’s biggest memory chip suppliers, said it expects shipments of both chips to sequentially decline in the near term.

Some PC customers are adjusting their memory and storage purchases due to shortages of non-memory components that are needed to complete PC bills,” Micron Chief Executive Officer Sanjay Mehrotra told analysts.

“We expect this adjustment at our PC customers to be largely resolved in the coming months.”

The question around Micron revolves around whether the memory industry is entering a prolonged downcycle, or encountering a more modest demand blip that will correct relatively quickly, Wedbush analyst Matthew Bryson said.

While Micron’s comments support the latter view, Bryson said he awaited more concrete data to support this outcome.

Micron forecast current-quarter revenue of $7.65 billion, plus or minus $200 million.

DRAM business

The supply of DRAM will begin to outpace demand in 4Q21, TrendForce said. DRAM products that are in oversupply may experience price drops of more than 5 percent QoQ, and the overall DRAM ASP will decline by about 3-8 percent QoQ in 4Q21.

PC DRAM prices are expected to decline by 5-10 percent QoQ as market demand for notebook computers weakens.

Server DRAM prices are expected to decline for the first time this year, by 0-5 percent QoQ due to high client-side inventory.

Mobile DRAM prices are expected to remain relative unchanged from 3Q21 levels despite a possible price drop ahead of time at the end of the year.

Graphics DRAM contract prices are expected to decline by 0-5 percent QoQ due to excess supply.

Micron posted revenue of $8.27 billion in Q4 fiscal 2021 versus $7.42 billion for the prior quarter and $6.06 billion for the same period last year. Micron reported revenue of $27.71 billion in fiscal 2021 versus $21.44 billion for the prior year.