Micron report indicates that growth outside of AI segment cannot be expected

The bias with which the American memory manufacturer Micron Technology reports its activities relative to other issuers in the semiconductor sector allows for more sensitive monitoring of the situation in the chip market. This week, Micron disappointed investors with its guidance for the current fiscal quarter and made it clear that outside the AI ​​market there is no talk of a recovery in demand.

Image source: Micron Technology

Analysts on average were expecting revenue of $8.98 billion for the current fiscal quarter, which ends at the end of February, but Micron Technology management disappointed them with a statement that the company plans to earn between $7.7 and $8 for the period. 1 billion. By the end of the trading session, Micron shares fell in price by 4.33% against this background, and after the close of trading they sank another 16.12% to $87.15 per piece. Even the good results of the previous fiscal quarter could not prevent the fall, which corresponded to market expectations for revenue ($8.71 billion) and turned out to be better than forecasts for specific income per share ($1.79 versus $1.75).

Meanwhile, at the quarterly conference, Micron noted the server direction and Nvidia computing accelerators as such as areas of activity with positive dynamics of revenue growth, since for some part of their range it supplies HBM3E memory. The memory market as a whole will return to growth in the spring of next year or by the summer, but in the consumer segment, no improvements can be expected in the coming months. It is the consumer sector that determines a significant part of Micron’s revenue, so progress in the server direction will not be able to compensate for this trend.

Last quarter, the company’s revenue grew 84% to $8.71 billion. In the server segment, Micron’s revenue grew 400% year-over-year. This division accounts for more than half of Micron’s revenue. One way or another, the rise in the server sector was not enough to compensate for the decline in the consumer segment. On the other hand, the correction of inventories in the consumer sector is more pronounced than before. By spring, they should reach normal values, according to Micron management. It is also reported that the PC market will grow by about 5% by the end of 2025, with the bulk of the growth occurring in the second half of the year. Owners of devices of this type update them more slowly than expected.

In the mobile segment, Micron’s revenue in the last quarter decreased sequentially by 19%, largely due to inventory adjustments. The automotive and industrial automation segments also showed a decline in revenue. In the 2025 fiscal year, which has already begun, Micron expects to spend $14 billion on the construction of new plants and the purchase of equipment. All three of the largest memory manufacturers, as Micron management notes, are now taking a more restrained approach to the issue of building new plants, and this should help reduce price fluctuations in the memory market.