Micron to cut DRAM and NAND output

According to TomsHardware, Micron expects 3D NAND bit production to grow only at the “single-digit percentage range” next year while reducing DRAM bit production next year. Micron is currently in the first quarter of the fiscal year 2023, which will have little impact on this quarter. Due to the rather long production and testing/packaging cycles of 3D NAND and DRAM, the market will feel the impact of Micron’s production cuts within a few weeks. Meanwhile, spot prices might react to Micron’s announcement sooner.

Micron started producing 232-layer 3D TLC NAND flash memory this summer and earlier started producing DRAM chips at a 1β process node. These new technology nodes are inherently capable of reducing cost and increasing bit yield. But Micron has slowed production to limit bit output as market conditions have deteriorated.

According to Micron’s disclosure, its total capital for the fiscal year 2023 is approximately $8 billion, a 30% decrease compared to the fiscal year 2022. The cut mainly involves equipment purchases for new fabs, which will slow down the introduction of the latest manufacturing technologies. Micron said it was “working toward additional CapEx cuts” without elaborating.

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