Chip gear makers take a beating after Micron’s glitchy forecast
Shares of chip gear makers fell after a tepid forecast by US-based Micron Technology exacerbated fears that a two-year chip boom is fizzling due to sluggish demand from makers of smartphones, PCs and servers. The industry is suffering from a supply glut as output, including from South Korean rivals Samsung Electronics and SK Hynix, is outstripping chip demand and pressuring prices. Wall Street analysts have said chipmakers will have to cut capacity for the industry to recover and prices to stabilise. Micron CEO Sanjay Mehrotra said weaker demand in DRAM (dynamic random-access memory) will likely persist through the first half of calendar 2019 with a recovery expected in the second half. “Our bigger-picture concern is that with the price declines through calendar [first quarter], we seem to be nowhere near a market-clearing price in either DRAM or NAND [a type of non-volatile memory that retains data when power is lost],” Morgan Stanley analyst Joseph Moore wrote in a client note. Mi...
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