America’s Micron Technology, one of the world’s leading memory and storage chip makers, is making billions of dollars in new global investments to meet anticipated long-term demand for its leading-edge technologies even as the firm scales back spending on chip production amid a worsening supply glut and market downturn.
Surging work-from-home demand for consumer technology products during the Covid-19 pandemic sparked a boom in semiconductor orders but inflationary pressures coupled with a return to the office has put a damper on new personal computer and smartphone purchases, leaving the market awash in chips. New US restrictions on chip and chip-making equipment exports to China are also roiling supply chains.
“The industry downturn is continuing and continues to be pretty severe,” said Sumit Sadana, Micron’s executive vice president and chief business officer, in an exclusive interview with Asia Times. “Our goal is that we quickly get to a point where the demand growth is ahead of supply growth so that the significant amount of… inventory starts to normalize.”
Sadana pointed to an “unusual confluence of events” including rate tightening to rein in decades-high inflation, the Russia-Ukraine war and China’s “zero-Covid” policy and property slump as causing an “unusual level” of supply-demand imbalance in DRAM and NAND memory chip markets that usually account for over 90% of Micron’s revenue.
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Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.
