CEO Anticipates "Several Hundred Million Dollars" in Annual Revenue, but Not Anytime Soon Investors who were counting on Micron Technology Inc. to offset near-term losses with a boost from artificial intelligence (AI) were disappointed during a recent call with Wall Street analysts. Executives at Micron (MU) revealed that they expect a net loss in the fiscal first quarter, dispelling speculation that the company's forthcoming AI-focused memory chips would provide immediate relief to the struggling memory-chip giant. In the fiscal fourth quarter, Micron experienced a 40% drop in revenue to $4 billion and incurred a net loss of $1. 43 billion. This quarter also saw the sale of some previously written-off inventory amid the ongoing semiconductor downturn. Investors had hoped that Micron's upcoming memory-chip family, known as HBM3 (high-bandwidth memory), would help offset declining sales and compensate for the loss of approximately half of its sales in China due to a government ban. However, with both PC and smartphone memory-chip sales experiencing a significant slowdown this year, the industry is faced with an excess inventory issue.

Additionally, Micron reported negative free cash flow of -$758 million. Despite the challenges faced by the memory and storage industry in fiscal year 2023, Micron's CEO, Sanjay Mehrotra, expressed optimism about the revenue potential of the HBM3 chip family. Mehrotra stated that revenue would start to rise in early 2024, but the majority of revenue from the new chips is expected to come later in the year. While Micron does expect another net loss in the first quarter, they anticipate pricing momentum to strengthen in the second half. Analyst Angelo Zino from CFRA Research highlighted the potential of HBM in AI servers, which could result in a substantial content boost compared to traditional servers. However, Zino noted that the current slowdown in consumer markets for PCs and smartphones is currently impacting Micron's performance. Following the disappointing news, Micron's shares fell nearly 4% in after-hours trading, as investors continue to hope for a rebound in revenue growth and a return to profitability.