Chipmakers cut output, investment – but government bucks never go out of style
Chipmakers are cutting back on production capacity and investment as demand for semiconductors continues to fall away, with Micron and Kioxia the latest to announce adjustments in light of the worsening outlook.reported today, and said in response that its capex investment in production in 2023 will be about $8 billion, down more than 30 percent from this year.Micron may be cutting investment at home next year, but the Japanese government is handing the company a subsidy of up to 46.
However, Gartner warned during the summer that semiconductor sales growth would likely fall off over the rest of this year, and For the full fiscal year 2022, Micron reported revenue of $30.76 billion, up from the $27.71 billion in 2021. In its earnings call, Micron President and CEO Sanjay Mehrotra said that the Q4 financial results were impacted by"rapidly weakening consumer demand and significant customer inventory adjustments across all end markets."
Given the elevated supplier inventories entering calendar 2023,"we expect industry profitability to remain challenging in 2023", he added.The US is said to have held a preliminary meeting with Asian partners of a working group focused on cooperation in the semiconductor supply chain. Micron went on to put out guidance for fiscal Q1 for revenues of $4.25 billion , way below last year's $7.6 billion figure, and nearly $1.5 billion below the average street estimate.
Kioxia also said it was confident that the market will bounce back, saying it will continue new product development and target sustainable long-term growth, as the company remains confident in the medium to long term growth outlook for the flash memory market.
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