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Semiconductor stocks were mixed on Friday as investors digested the implications of a spending cut from Micron Technology (NASDAQ:MU) and what it means for others in the space.
In 2023, Micron (MU) said it would cut total capital expenditures by 30% year-over-year and wafer fab equipment spending by up to 50% next year.
Kioxia, which competes with Micron (MU) in making memory chips, also said on Friday that it would cut wafer input volume by roughly 30% at its Yokkaichi and Kitakami flash memory plants — which are operated jointly with Western Digital (WDC) — , starting in October.
Looking to the next quarter, Boise, Idaho-based Micron (MU) said it expects revenue to be between $4B and $4.5B, with earnings per share ranging between a loss of 6 cents and a gain of 14 cents. Gross margins are expected to be between 24% and 28%.
Analysts were expecting Micron (MU) to generate $6.02B in sales and earnings of 87 cents per share.
In addition, Micron (MU) is set to receive up to $322M from Japan to produce advanced memory chips at a Hiroshima factory, according to Japan’s trade minister.
Micron (MU) shares rose 2%, though off their best levels of the session.
Chip suppliers such as Lam Research (NASDAQ:LRCX), Applied Materials (AMAT), KLA Corp. (NASDAQ:KLAC) and ASML Holding (ASML) saw modest losses.
Separately on Friday, investment firm Citi added KLA Corp. (KLAC) to its highest conviction list, while simultaneously removing Lam Research (LRCX).
Other chip stocks were mixed, with Nvidia (NVDA), Advanced Micro Devices (AMD) and Broadcom (AVGO) showing gains of roughly 1% or more, while others such as Intel (INTC), Texas Instruments (TXN) and Analog Devices (ADI) saw modest losses.
Mizuho recently downgraded both Micron Technology (MU) and Western Digital (WDC), citing recent checks that showed “steepening price declines” heading into the next quarter and the first half of next year.