The first significant chipmaker to raise concerns about declining demand is Micron
Over 31% of the Philadelphia SE Semiconductor index has fallen.
Micron claimed to be decreasing wafer starts for DRAM and NAND.

As the semiconductor company struggles to get rid of excess inventory because of a slowdown in demand, Micron announced on Wednesday that it would reduce the supply of memory chips and make additional cuts to its capital spending plan. In afternoon trade, business shares dropped 5.8% to $59.44 (approximately Rs. 4,900).

In the face of decades-high inflation, Micron was the first major chipmaker to raise concerns about waning demand for smartphones and personal computers earlier this year. Chipmakers and electronics firms, which had been preparing for the pandemic-driven demand surge to last and had for a long time struggled with supply constraints, quickly discovered themselves with excess inventory.

All end-markets, from personal electronics to data centres to industrial, are now being impacted by the general industry malaise. Over 31% of the Philadelphia SE Semiconductor index has fallen so far this year. According to Wedbush Securities analyst Matt Bryson, widespread supply and capex cuts are a positive sign that the memory market has bottomed out.

However, he warned that a prolonged decline in demand might have an adverse effect on the entire technology sector. In comparison to the fourth quarter that ended on September 1, Micron stated it is reducing DRAM and NAND wafer starts, or the initial process in semiconductor production, by about 20%. 

For 2023, the company predicts that bit supply growth will be negative for DRAM and low single digits for NAND. According to Bryson, the perception that component suppliers and semiconductor vendors have already factored adverse conditions into their forecasts, effectively derisking the stocks, is likely what is weighing on Micron's outlook.