Posted on 12/05/2022 5:01:55 AM PST by FarCenter
SINGAPORE – America’s Micron Technology, one of the world’s leading memory and storage chip makers, is making billions of dollars in new global investments to meet anticipated long-term demand for its leading-edge technologies even as the firm scales back spending on chip production amid a worsening supply glut and market downturn.
Surging work-from-home demand for consumer technology products during the Covid-19 pandemic sparked a boom in semiconductor orders but inflationary pressures coupled with a return to the office has put a damper on new personal computer and smartphone purchases, leaving the market awash in chips. New US restrictions on chip and chip-making equipment exports to China are also roiling supply chains.
“The industry downturn is continuing and continues to be pretty severe,” said Sumit Sadana, Micron’s executive vice president and chief business officer, in an exclusive interview with Asia Times. “Our goal is that we quickly get to a point where the demand growth is ahead of supply growth so that the significant amount of… inventory starts to normalize.”
Sadana pointed to an “unusual confluence of events” including rate tightening to rein in decades-high inflation, the Russia-Ukraine war and China’s “zero-Covid” policy and property slump as causing an “unusual level” of supply-demand imbalance in DRAM and NAND memory chip markets that usually account for over 90% of Micron’s revenue.
“The sooner [inventories] start to normalize the better it will be because the current trajectory is for these inventories to continue to increase. Changing the trajectory of these inventories is a hugely important focus item for us. In order to address that, we are significantly reducing our capital investment in the short term,” said Sadana.
Micron intends to invest more than US$150 billion globally over the next decade on memory chip manufacturing and research and development. Now, however, the semiconductor maker plans to reduce capital expenditure by 33%, or over $8 billion, in 2023, down from $12 billion allocated in 2022, with new wafer fabrication equipment investments set to be slashed by around 50%.
On November 16, Micron said it would make further unspecified spending cuts in response to downcast market conditions, with year-on-year bit supply growth, which refers to the amount of memory produced, estimated to be negative for DRAM and in the single-digit percentage range for NAND, both figures lower than the previous quarter’s projections.
While the cut in capital expenditures next year is certain, the implementation of a $150 B plan over 10 years will depend on a recovery in the memory chip market and on Micron's ability to compete with Samsung and SK Hynix.
https://companiesmarketcap.com/semiconductors/largest-semiconductor-companies-by-revenue/
Despite US$52.7 billion from the CHIPS Act, US chip production may only increase by 1% in 2025
See the incentives that helped lure Micron to Central New York
That last one is behind a paywall, but that amount is around $9 bil.
https://www.nasdaq.com/market-activity/stocks/mu/institutional-holdings
Check out the names at the top of the list.
Familiar, ain’t they.
Solid state hard drives are going for super cheap $$ on Amazon right now.
I can’t believe that is what not that long ago that i was spending hundreds...
They are the biggest firms providing index mutual funds and ETFs. Funds based on the S&P 500 or similar indexes are the core holdings of many investors, both in retail accounts and in retirement IRA and 401K accounts.
So for any company in the S&P 500 index, these firms are naturally the largest holders.
Something Raytheon, Disney, Micron, et al all have in common.
What is the chip supply shortage that has so affected automobile manufacturing? There can’t be much data storage in vehicles, so I’m guessing industrial microprocessors? How can there be such a glut if memory and shortage of chips for cars? Has the auto problem eased?
Part of the problem is that when sales fell so much after Covid hit, auto manufacturers cut back their orders for chips.
So the foundries allocated capacity to other customers.
I think that the auto companies have now gotten back in line for more parts. Most of these are microcontrollers and logic chips made on older foundry processes, and fabs aren’t very interested in adding capacity for them. I’m not sure whether the latest foundry processes meet the auto industry requirements for environmental tolerances, reliability, longevity, etc. At any rate, it would take time to qualify new parts on new processes.
In late 2020 I had some early signs of impending failure on the mechanical drive in my primary laptop. I ordered up a 1T Samsung SSD, and an external USB enclosure for it. I copied the image over, swapped out the drive, and have been running fine ever since, disaster averted.
I just looked up the price I paid and the current price, and it’s $20 more, $147 then, $167 now.
I’m not seeing super cheap.
Thanks. That’s helpful. I figured it was microcontrollers and logic, but I hadn’t thought about the older process angle.
A freeper last week posted a amazon link showing some 256G HD’s for around 20 bucks...the one in particular was $17.99.
I haven’t looked since but i have to go on amazon in a while i’ll check again.
I have a Samsung as well the good quality and rep might account for the higher price i dunno..
Perhaps it’s the type I needed, for an older laptop, M.2 SATA. It wasn’t one of the new PCIe or NVMe types.
No one is going to run a manufacturing facility of any size with solar and/or wind power. Any talk of future events are a fools errand until our energy future is addressed.
M.2 drives are on the upswing in prices because they’re being slowly phased out and production volumes are dropping. This is the standard inverse bell curve of memory pricing. Same thing is happening to DDR3 RAM now that DDR5 is out.
Wow, that IS cheap!
I need to look around to see if I have any need for something like that.
yea i might pick one up for my older laptop..
Update from Upstate NY...
Micron is the excuse, not the reason.
I don’t think Micron will hiring a lit of illegals.
And if employees want MFDs, it’s likely because they don’t think their jobs will be around for long, or that they will.
Another update...
I’m smelling a rat.
Ruh roh update from Upstate NY...
Shouldn’t this hash have been settled first, especially the energy issues...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.