Micron cuts DRAM and NAND output to reduce price drops

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Due to rapidly deteriorating base memory demand and lower pricesthe micron is to cut wafer starts for 3D NAND and DRAM immediately by 20% compared to the previous quarter. The company now expects its 3D NAND bit production to increase insignificantly over the next calendar year, while its DRAM bit production will be reduced in 2023.

In an effort to address slowing demand for 3D NAND and DRAM memory, Micron is reducing wafer startups by approximately 20% compared to the fourth quarter of fiscal 2022, which ended September 1, 2022. discounts will be applied to all technology nodes. which Micron uses for high-volume production, so essentially the company is reducing production of virtually all types of its products.

Micron’s current fiscal 2023 first quarter ends in early December, so the reduction in wafer starts today will hardly have a material impact on the company’s results for the quarter or the market. Since the production and test/packaging cycles of 3D NAND and DRAM are quite long, the market will feel the effect of Micron’s cuts in a few weeks. Meanwhile, spot prices may react earlier to Micron’s announcement.

But the current reduction in wafer startups will impact the company’s production for all of fiscal 2023, as Micron expects its DRAM bit output to drop and its 3D NAND bit output increases in the “single-digit percentage range”.

Micron has launched the production of 232-layer 3D NAND memory this summer and started doing LPDDR5X memory on its 1β (1-beta) manufacturing process earlier today. The two new production nodes will allow Micron to reduce costs and increase bit production, but the company warned in late September that it would slow the ramp-up of 232L 3D NAND and 1β DRAM production in the purpose of limiting the production of bits. Micron’s 232-layer 3D NAND devices with a 2400 MT/s interface are configured to enable the Fastest SSDs with a PCIe 5.0 x4 interface which will eclipse currently available best SSDs with a sequential read speed of 12.4 GB/s.

Micron also disclosed in September that its capital expenditures for fiscal year 2023 would total approximately $8 billion, down 30% from fiscal year 2022. The cuts will primarily relate to the purchase of new wafer fabrication equipment. , which will slow the adoption of the company’s latest manufacturing technologies. The company’s construction CapEx is expected to more than double as the company builds its new plant in Idaho. Today, the company said it was “working on further CapEx reductions” without giving further details.

“Micron is taking bold and aggressive steps to reduce bit supply growth to limit the size of our inventory,” said Sanjay Mehrotra, Micron’s chief executive. “We will continue to monitor industry conditions and make further adjustments as necessary. Despite short-term cyclical challenges, we remain confident in the secular demand drivers for our markets and, over the long term, we we expect memory and storage revenue growth to outpace the rest of the semiconductor industry.”

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