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Micron to Cut Capital Expenses Next Year by $1.25 Billion


electronicdesign.com, Dec. 21, 2018 – 

Micron Technology, the largest American memory chip maker, plans to cut capital expenditures next year by more than 10 percent as customers try to get through the long-term storage and short-term memory chips they already have. The company said on Tuesday that it would cut $1.25 billion of capital expenses next year, bringing its total expenditures to $9 billion to $9.5 billion and feeding into fears that the semiconductor industry's boom is over.

Micron's move to crop capital expenditures next year came as the company reported fiscal first quarter revenue of $7.9 billion, an increase of around 16 percent from the same quarter last year. Operating profit came out to $3.9 billion. Customers are slashing orders for chips used in smartphones, while shortages of Intel's Core processors have ramped down demand in personal computers, according to the company's chief executive officer Sanjay Mehrotra.

Orders for chips used as main memory and storage in factories, automobiles and data centers have offset slowing sales of chips used in smartphones and personal computers. But the company's broader customer base has struggled to protect it from fluctuations in supply and demand that have long threatened its profitability. Sales have started to slump and prices have softened over the last year, according to Micron.

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