Micron likely to see continued weakness in Q4 as memory prices continue to slide
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Micron Technology (NASDAQ:MU) is slated to report fourth-quarter earnings after the close of trading and the memory chip maker may see continued weakness in its two key markets, as prices for dynamic random access memory and NAND have continued to decline in recent months.
Last week, investment firm Mizuho downgraded Micron (MU), as well as Western Digital (WDC), citing recent checks showing "steepening price declines" heading into the next quarter and first half of next year.
Analyst Vijay Rakesh cut his rating on Micron Technology (MU) to neutral from buy, noting the data center and server markets are starting to show weakness, especially "with softening demand in China/Europe and slowing CPU/GPU ramps."
According to analyst consensus, Micron (MU) is expected to earn $1.38 per share on $6.78B in revenue. 
Micron (MU) Chief Executive Sanjay Mehrotra recently said the company had broke ground on its newly announced $15B factory in Idaho and would unveil another U.S.-based plant soon.
Citi analyst Atif Malik noted recently that DRAM prices continue to drop sharply, with server prices moving under $100 this quarter. And with prices showing no signs of bottoming this quarter or next, Micron Technology (MU) may cut spending by up to 40%. 
"Assuming 10% DRAM demand bit growth next year, we model DRAM capex cuts ~30% or in-line with [the] 2018/19 correction," Malik wrote in a recent note to clients.
As such, it's likely Micron (MU) guides fiscal 2023 spending to be down between 35% and 40% from $12B in fiscal 2022, Malik added.
Micron (MU) has previously said both wafer fab equipment and capex spending would be down "significantly," Malik wrote.
The analyst pointed out that channel inventory is roughly 10 weeks and some hyperscalers have done some "opportunistic" buying for the first-half of 2023, however, there is still weak growth from the smartphone and PC markets.
Last month, investment firm J.P. Morgan said that memory chip makers, including Micron (MU), were starting to become more attractive even as pessimism in the industry rises.