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Investing.com — Shares in European semiconductor companies dropped on Friday following an outlook warning from U.S. peer Micron (NASDAQ:MU) that hinted at gloomy growth prospects for the rest of the sector.
In its third quarter results, Micron said the demand environment for chipmakers has “weakened.” The company added that it will moderate its supply growth in its next fiscal year.
Micron now expects fourth quarter diluted earnings per share to come in at between $1.43 and $1.83 on revenue of $6.8B and $7.6B. Analyst forecasts had seen EPS at $2.69, with sales of $9.31B.
Micron shares are down by more than 4% in pre-market trading.
The announcement also weighed on semiconductor firms in Europe. ASM International NV (AS:ASMI) and ASML Holding NV (ETR:ASME) in the Netherlands, as well as Infineon Technologies AG (ETR:IFXGn) and Siltronic AG (ETR:WAFGn) in Germany, all slumped to near the bottom of the pan-European STOXX 600 in afternoon trading.
Chipmakers have seen a slowdown in demand so far this year due in part to supply chain delays, a recent spike in inflation, and geopolitical concerns, according to research firm Gartner.
In a study published on Thursday, Gartner said PC sales in Europe, the Middle East, and Africa will be particularly hard hit, with the market forecast to decline by 14% this year. Demand in the region will be dampened by the war in Ukraine and rising prices, as well as lockdowns in China that will constrict the availability of products, Gartner added.
Overall, global shipments of total devices – which include PCs, tablets, and mobile phones – are on pace to fall by 7.6% in 2022, according to Gartner.
