As DRAM prices plunge, Micron Technology expected to cut spending up to 40%, Citi predicts
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The price of dynamic random access memory continues to drop sharply, with server prices moving under $100 this quarter. And with prices showing no signs of bottoming this quarter or next, investment firm Citi said Micron Technology (NASDAQ:MU) is likely to cut spending by up to 40%.
Analyst Atif Malik noted channel inventory is roughly 10 weeks and some hyperscalers are doing some "opportunistic" buying for the first-half of 2023, but there is weak growth from the smartphone and PC markets, making it likely that Micron (MU) cuts spending.
"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 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.
Boise, Idaho-based Micron (MU) is slated to report fourth-quarter results next week. 
On Wednesday, Mizuho downgraded Western Digital and Micron (MU), citing recent checks showing "steepening price declines" heading into the next quarter and first half of next year.