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Actions in Micronic Technology (MU), semiconductor equipment makers and chipmakers were hit Tuesday after a market research company forecasted lower prices for memory devices in the fourth quarter. Micron stock fell while the Nasdaq Composite also fell.
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Contract prices for memory chips in personal computers will decline by up to 5% quarter over quarter in the three months ending December 31, according to market research forecasts TrendForce.
This prompted Micron stock to fall 5.4% to close at 75.91 on the stock market today. Materials applied (AMAT) fell 2.8% to 138.06. Lam Research (LRCX) fell 3.6% to 617.17.
TrendForce said the industry is feeling the effects of PC makers, also known as original equipment manufacturers or OEMs, who have a glut of dynamic random access memory, or DRAM, chips.
“In terms of the contract market, PC OEMs currently have relatively high levels of DRAM inventory as they have sourced PC DRAM significantly in anticipation of an upcoming shortage,” TrendForce said. “Not only has OEM PC manufacturers’ high DRAM inventory exerted downward pressure on possible price increases for PC DRAMs, the gradual lifting of Covid restrictions in Europe and the United States will reduce also likely the overall demand for laptops, thus pulling down the overall demand for PC DRAM. “
Micron share: outlook has exceeded expectations
Stocks in semiconductor stocks Nvidia (NVDA), Advanced micro-systems (AMD) and Semiconductor manufacturing in Taiwan (TSM) also retreated.
Silicon motion technology (SIMO), which makes controllers for memory chips, fell 5.8% to 75.36.
The Nasdaq fell 0.5% to nearly 14,788.09. While semiconductor stocks were hit on Tuesday, many software growth stocks pulled back as well.
Micron, based in Boise, Idaho, earned adjusted $ 1.88 per share on sales of $ 7.42 billion in the quarter ended June 3. For the current quarter, Micron expects to earn adjusted $ 2.30 per share on sales of $ 8.2 billion. Wall Street predicted earnings of $ 2.18 per share on Micron’s fiscal fourth quarter sales of $ 7.88 billion.
Semiconductor stocks thrive in 2021
AMAT stock gained 60% in 2021. Micron stock gained 1.5% this year. AMD stock holds a composite rating of 99 out of 99, according to IBD Stock Checkup.
Nvidia shares are listed in the IBD ranking.
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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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