Chip stocks tumble; Micron's warning suggests weakness until 2024

Azenta

22/12/2022 17:32

** U.S. chipmakers tumbling, with the Philadelphia chip
index  .SOX  underperforming the broader market after
memory-chip co Micron Technology Inc  MU.O  flagged persisting
over-supply
    ** The index's biggest decliner was Lam Research  LRCX.O ,
which cites Micron as one of its most significant customers in
regulatory filings. Lam was last down 10.6% and on track for its
biggest one-day pct decline since March 2020
    ** Nvidia Corp  NVDA.O  and Applied Materials  AMAT.O  were
vying for the next-biggest-decliner ranking with AMAT last down
8.8% and NVDA last down 8.9%
    ** The SOX was down 5.7% on track for its biggest one-day
drop since Oct. 7. This compared with the Nasdaq's  .IXIC  3.0%
drop on the day so far    
    ** The best performers in the sector were Azenta  AZTA.O ,
down 1.5% and IPG Photonics  IPGP.O  down 1.8%
    ** MU said it will cut 10% of its 48,000-strong workforce
next year and significantly reduce capex plans in fiscal 2024;
stock down 2.4%  urn:newsml:reuters.com:*:nL4N33B31W
    "It doesn't feel like Micron is suggesting this (downturn)
is quickly over and bouncing back," said Bernstein analyst Stacy
Rasgon. "If you were playing for equipment growth in 2024,
Micron gave you a reason not to play that."
    ** Micron CEO Sanjay Mehrotra said: "The industry is
experiencing the most severe imbalance between supply and demand
in both DRAM and NAND in the last 13 years... We are also taking
measures to cut costs and operating expenditures (opex) across
the company," says 
    ** The SOX was down 36.7% YTD vs Nasdaq's  .IXIC  decline of
~33% and the S&P 500 tech sector's  .SPLRCT  drop of 29.5% 
 (Reporting by Yuvraj Malik and Sinéad Carew)
 ((yuvraj.malik@thomsonreuters.com;
sinead.carew@thomsonreuters.com))