According to Barron's and The Motley Fool reported on the 13th, Summit Insights analyst Kinngai Chan lowered Micron's investment rating to Hold from Buy, mainly because the supply-demand dynamics of memory chips may not improve this year.
Analysts pointed out that although data center customers maintained demand, industry checks indicate persistently sluggish demand from smartphone customers and a continued decline in PC client demand.And recent industry surveys showed that Asian distributors, module factories and ODMs have high memory chip inventories.
In the second half of the year, Micron might have to reduce its prices. This could hit its gross margin as the price decline could outpace Micron's cost reductions, the analyst said.
Micron has more than 50% exposure to consumer-like markets such as PCs, mobile, and others, which will be affected by macroeconomic headwinds.In addition to concerns about weak demand and excess inventory, the market is also concerned about lower capital expenditures by cloud service providers for Micron's end customers, which will directly affect Micron's revenue and profits.