Micron, the largest memory semiconductor company in the US, has posted its largest-ever loss in the second quarter of its fiscal year (December to February). As Samsung Electronics and SK Hynix are set to release their earnings, some analysts have suggested that this is a sign that the global memory semiconductor market has hit bottom. Micron has predicted that it could see growth in the next quarter, suggesting that the worst slowdown may be over.
On March 28, Micron announced its financial results for the second quarter of fiscal year 2023, reporting sales of $3.69 billion (approximately KRW 4.7888 trillion) and an operating loss of $2.31 billion (approximately KRW 2.9979 trillion). This represents a 52% decrease in sales compared to the same period last year and falls short of financial analysts’ expectations of $3.71 billion in sales.
As a US company that announces its results a month earlier than domestic companies, Micron’s financial performance has become a barometer for the state of the industry. Micron is the third-largest player in the DRAM semiconductor market, behind Samsung Electronics and SK Hynix. As domestic firms are expected to report losses of around KRW 4 trillion in the first quarter (January to March), it is noteworthy that Micron, a leading US memory semiconductor company, has also reported a significant loss of nearly KRW 3 trillion.
However, Micron has expressed optimism that the situation will improve in the next quarter. The company expects that demand and supply will return to normal levels after the worst of the downturn has passed. CEO Sanjay Mehrotra stated during the earnings announcement that “customer inventory levels are improving, and we anticipate that industry supply and demand will continue to gradually balance out.” He also predicted that “revenue in the data center market will hit a low point this quarter and then begin to grow,” adding that “data center customer inventory should reach relatively normal levels by the end of this year.”
Furthermore, the growth of the artificial intelligence (AI) market, such as ChatGPT and other similar technologies, is expected to have a positive impact on the market. Mehrotra stated, “We anticipate glimpses of market recovery, driven by explosive growth in AI markets such as ChatGPT, and expect to see record growth by 2025.”
Meanwhile, Taiwanese market research firm TrendForce has forecast that the memory semiconductor market will continue to decline for the time being. The company reported that the average selling price of DRAM had fallen by around 20% in the first quarter due to production cutbacks by global DRAM suppliers such as SK Hynix and Micron. While the price decline is expected to slow to 10-15% in the second quarter, it remains uncertain whether demand will recover in the latter half of the year.