- Pandemic recovery, rising interest rates, a falling stock market, and recession fears have weakened consumer appetite for electronics.
- Retailers are stuck with goods on their shelves, and producers of products in high demand early in the pandemic battled surplus inventory, the Wall Street Journal reports.
- Consumers can avail products from washing machines to laptops faster and sometimes more cheaply than a year ago.
- For chip makers, the shift triggered a wave of job cuts and reduced capital spending to restore profitability levels that have eroded in recent months.
- Chip inventory levels exceeded way beyond target level, Micron Technology, Inc (NASDAQ:MU) CEO Sanjay Mehrotra said after missing Wall Street earnings projections, gave a subdued outlook and said it would cut about 10% of its workforce.
- Leading PC makers HP Inc (NYSE:HPQ) and Dell Technologies Inc (NYSE:DELL) also remained stuck with excess goods on their shelves compared to a year ago.
- Intel Corp (NASDAQ:INTC), Advanced Micro Devices, Inc (NASDAQ:AMD), and Nvidia Corp (NASDAQ:NVDA) also expressed their concerns over excess inventory likely to stay elevated.
- Micron expected the situation to persist through its fiscal year’s first half.
- Smartphone sales, too, deteriorated, denting chipmakers’ fortunes. Micron, Qualcomm Inc (NASDAQ:QCOM), Samsung Electronics Co, Ltd (OTC:SSNLF), and Apple Inc (NASDAQ:AAPL) repeatedly cut their sales projections this year.
- However, the industry expected chip sales to double by 2030, surpassing $1 trillion globally. Micron eyed a facility in upstate New York that could cost up to $100 billion, partly funded by U.S. government incentives.
- Some chip makers like Lattice Semiconductor Corp (NASDAQ:LSCC) saw the inventory buildup as an opportunity.
- Price Action: MU shares traded higher by 0.68% at $50.54 in the premarket on the last check Tuesday.
Wells Fargo Maintains Overweight on Floor & Decor Hldgs, Lowers Price Target to $95
Wells Fargo analyst Zachary Fadem maintains Floor & Decor Hldgs (NYSE:FND) with a Overweight and lowers the price target from $105 to $95.
