Chips Growth Looks Set to Stall
Tech giants’ infrastructure spending doubled in three years. That’s unlikely to continue.
During Micron Technology Inc.’s latest quarterly earnings call in September, Chief Executive Officer Sanjay Mehrotra asked those listening to please forget the past. Yes, the memory-chip maker had just given a disappointing sales forecast for the current quarter, but it was just a temporary detour, he said. Investors want to believe this sort of thing. For four of the past five years, Micron has been a market favorite, proof the semiconductor boom was so strong that even memory-chip growth would keep rising for the foreseeable future.
But a buildup of inventory and a steady drop in prices have begun to undermine the industry line that an expanding range of new data-hungry artificial intelligence technologies, including driverless cars, will steadily fuel demand. With the chips business an unprecedented five years into a boom that’s doubled most of the big companies’ values, the consensus is building that winter is here.