Micron warns that weakened consumer demand will hurt smartphone sales
Sanjay Mehrota, Micron Technology President & CEO at WEF in Davos, Switzerland May 24, 2022.
Adam Galica | CNBC
Micron Technology, a major supplier of memory chips for PCs and smartphones, said on Thursday that they expect smartphone sales to be significantly lower than previously expected for the rest of 2022, citing a reduction in consumer demand.
Micron CEO Sanjay Mehrotra said in an earnings interview with analysts that he expected the volume of smartphone devices to fall by around 5% compared to last year. Analysts expected growth of around 5%, Micron said. The company also warned that it believed that PC sales could fall by 1[ads1]0% compared to last year, and that it made changes in production growth to match weaker demand.
He added that some PC and smartphone customers “adjusted inventory” in the second half of the year.
“If you were to translate it into devices, it would be a reduction of 130 million units compared to expectations earlier in the year for smartphones,” Mehtotra said. “Similarly, for the PC, let’s say 30 million kind of reduction in total units compared to estimates earlier in the year.”
Micron’s warning is the latest sign that the market for new computers and telephones is starting to fall after two years where the pandemic left the growth as people worked and went to school from home.
Micron delivers memory to smartphone makers, including Apple, Motorola and Asus, so it can see broader sales trends.
“Near the end of [the quarter] “We saw a significant reduction in demand for industrial pieces, mainly due to weaker demand in consumer markets, including PCs and smartphones,” said Mehrotra. “These consumer markets have been affected by the weakness in consumer spending in China, the war between Russia and Ukraine. , and rising inflation around the world. “
The forecast from the chip manufacturer is in line with some estimates from the third-party industry. Earlier this week, Gartner predicted that global mobile phone sales would fall by 71% in 2022, revising its previous estimate of 2.2% growth.
The Micron share fell more than 2% in expanded trading on the company’s report for the third quarter of 2022, which ended on 2 June. Sales rose 16% annually to $ 8.64 billion, and the company’s earnings per share of $ 2.59 beat analysts’ expectations.
However, the company reduced its revenue guidance for the current quarter to $ 7.2 billion against consensus expectations of $ 9 billion.
