Micron To Cut 10% of Workforce As Demand For Computer Chips Slumps (yahoo.com) 47
An anonymous reader quotes a report from Bloomberg: Micron Technology Inc., the largest US maker of memory chips, said the worst industry glut in more than a decade will make it difficult to return to profitability in 2023. The company on Wednesday announced a host of cost-cutting measures, including a 10% workforce reduction, aimed at helping it weather a rapid drop in revenue. Micron also projected a steep sales decline and a wider loss than analysts had estimated for the current quarter. The industry is experiencing its worst imbalance between supply and demand in 13 years, according to Micron Chief Executive Officer Sanjay Mehrotra. Inventory should peak in the current period, then decline, he said. Customers will move to more healthy inventory levels by about the middle of 2023, and the chipmaker's revenue will improve in the second half of the year, Mehrotra said. "Profitability will be challenged throughout 2023 because of the oversupply that exists in the industry," he said in an interview. "The rate and pace of the recovery in terms of profitability depends on how fast supply is brought into line."
Micron, which had already announced factory output reductions, is cutting its budget for new plants and equipment, and now expects to spend from $7 billion to $7.5 billion for the fiscal year, a decline from an earlier target of as much as $12 billion. The company is slowing the introduction of more advanced manufacturing techniques and predicts that spending on new production will fall throughout the industry. [...] In addition to its planned workforce reductions, the company has suspended share repurchases, is cutting executive salaries and will skip companywide bonus payments, executives said on a conference call after its results were released. Micron said sales will be about $3.8 billion in the fiscal second quarter. That compares with analysts' average estimate of $3.88 billion, according to data compiled by Bloomberg. In the three months ended Dec. 1, Micron's revenue declined 47% to $4.09 billion.
Micron, which had already announced factory output reductions, is cutting its budget for new plants and equipment, and now expects to spend from $7 billion to $7.5 billion for the fiscal year, a decline from an earlier target of as much as $12 billion. The company is slowing the introduction of more advanced manufacturing techniques and predicts that spending on new production will fall throughout the industry. [...] In addition to its planned workforce reductions, the company has suspended share repurchases, is cutting executive salaries and will skip companywide bonus payments, executives said on a conference call after its results were released. Micron said sales will be about $3.8 billion in the fiscal second quarter. That compares with analysts' average estimate of $3.88 billion, according to data compiled by Bloomberg. In the three months ended Dec. 1, Micron's revenue declined 47% to $4.09 billion.
You have a fab, why not pivot? (Score:4, Insightful)
So many shortages for other types of chips.
Re:You have a fab, why not pivot? (Score:4, Informative)
Presumably it's because making memory chips is totally different than making e.g. automotive chips - different machines, different processes, maybe even different people with different skills. But then, that's just my guess.
Re: You have a fab, why not pivot? (Score:1)
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It will free up 99% of the money hoarded in the world thereby making everyone rich and able to afford chips again. #GasTheJews
When you kill the people that make the money, you don't become rich.
You become poor.
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The term "making money" is profoundly misleading and we should avoid it as far as possible.
The only people who actually make money are governments. (If anyone else does so, that's the crime of counterfeiting).
When we say "Bill Gates has made $60 billion" - or whatever - what we really mean is that he persuaded others, by various means, to give him $60 million. Usually in exchange for some real or imagined "consideration". As few people are qualified to assess the dollar value of a copy of Windows (moreover,
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You can't even take a CPU designed for TSMC's process and manufacture it at Intel's fabs. A chip manufacturing process has design rules which lists features the process can and can't handle, and chip designs need to follow the rules for their intended manufacturing process.
Either Micron needs to figure out how to manufacture TSMC designs, or chips need to be re-designed for Micron's processes. Both of those are a very expensive, multi-year effort.
Re: You have a fab, why not pivot? (Score:2, Redundant)
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What I don't get (as someone who's entire career was on the edges of the semiconductor industry) is how they keep any good people around with how horribly cylical their business is. It seem like they (the entire industry) would be smart enough to not boom/bust every few years.
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16GB ought to be enough for anyone!
Well, actually it is. I put 32GB in my main system 10 years ago and have never come close to maxing it out, let along needing to upgrade. The rise of SSDs has also helped in taking a lot of pressure off of main memory.
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I do game development, and 32GB isn't enough to run one of the Unreal Engine demos (the Matrix Open City), which requires 64GB of RAM.
Mostly, though, yeah, 32GB is fine these days.
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Which chips? What makes you think Micron's fabs will meet those customers needs?
Only the demand for Micron chips slumps (Score:1)
Japanese makers are opening additional factories in order to cope with the demand.
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Japanese makers are opening additional factories in order to cope with the demand.
One possible issue may be an uptick in SoCs that have RAM on-die, which means no outboard RAM chips from companies like Micron Technologies.
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On die? Less likely. On package? More likely. Micron can still make hay there.
Inevitable spike (Score:2)
It sounds like there is still pent up demand, it's just that consumers are delaying yet again. Eventually existing equipment will wear out and there will be a shortage again. However, maybe the
Re: Inevitable spike (Score:2)
Re: Recession is here (Score:1)
Re: Recession is here (Score:1)
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USA is a funny place :D
Because we have all these tech companies?
Re: Recession is here (Score:2)
* sent by my OnePlus mobile
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The USA has tech companies again now? I thought the were shipped off to China.
Just an excuse to fire workers (Score:4, Interesting)
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Or maybe just produce what the customer wants instead of what you think he should buy? What is this, Soviet Russia?
Re: Just an excuse to fire workers (Score:1)
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Well if a recession is here and people want affordable memory then a smaller company can make it cheaper so people can buy it. The best way to do this is to reduce staff so they can cut prices.
This was the intended solution the Federal Reserve and Banks around the world are hoping for by raising interest rates. When companies who over hired and have had waste and inefficiencies start to tighten then inflation will go away.
Re: Just an excuse to fire workers (Score:2)
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2 quarters of negative GDP growth is a recession. Hirings and firings are always lagging indicators. When the Great Recession ended it took years after it ended for unemployment to return to previous levels.
What is happening now is pent up demand from supply chain issues messed up supply and demand and workers never were hired back fully. Now they are catching up but it is a recession as the supply chain is now overfilled. Next year jobs will follow but since they under hired it won't be quite so negative.
A
Re: Just an excuse to fire workers (Score:2)
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Wonder how many may end up working in China, since they are going big on this industry.
Even if you refuse to work for a China company, not sure how difficult it will be for them to set up a shell company elsewhere and hire "consultants" to be able to get some insights.
Good thing (Score:2)
People Don't Upgrade Computers Every Year (Score:2)
From Microns... (Score:2)
Bad management and moron policies (Score:1)
Micron was once a great company, but they went toxic and I do not personally know any engineers willing to use their parts anymore, I certainly will not and have not for years.
Was it COVID policies? Nope.
Did they go "woke" and offend people? Not that I'm aware of - they went evil before I encountered the term "woke"
So what did they do? This:
Back in the 1990s, Micron was just like all the other good chip companies in supporting engineers working on new product designs, but somewhere along they way they becam
Can someone explain this? (Score:2)
I keep hearing that there is a surplus of chips - only at the same time, it's virtually impossible to get any at a sensible price from a licensed retailer instead of some scalper.
The whole shit reeks more and more like the crap we've heard back in the Soviet days, when we were told that everything is available in abundance, but you couldn't buy jack shit.
Great! (Score:2)
Finally cheap GPU prices .... right?!
New plant in NY? (Score:1)
They just signed a deal to build a $100 billion (USD) chip fab plant just outside of Syracuse, NY.
Wonder if that deal will fall through?
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By the time it gets built and turning out chips, we'll be in another part of the cycle.