Micron, a leading maker of computer memory chips, has announced plans to restructure its business in response to a significant drop in demand and oversupply. According to its CEO, Sanjay Mehrotra, prices for computer memory products have “deteriorated significantly” in recent months, prompting the company to reduce its workforce by approximately 10% over 2023 through voluntary departures and layoffs. In addition, employee bonuses will be suspended next year and executive salaries will be reduced for the remainder of fiscal 2023, which ends in August. The restructuring will not affect Micron’s plans to invest $15 billion in a new semiconductor plant in Boise, Idaho, or its commitment to make a long-term investment of up to $100 billion in a plant in upstate New York. These investments were made possible by the CHIPS and Science ACT of 2022, a $280 billion bill aimed at strengthening the competitiveness of the U.S. semiconductor industry against China.

However, despite these investments, Micron has struggled with declining demand for its products, especially in the areas of personal computers and smartphones. In addition, the company has faced a significant imbalance between supply and demand for its NAND and DRAM chips, prompting it to exercise “supply discipline” by reducing capital expenditures and wafer rollouts. Despite the decline in revenue, which was slightly below $4.1 billion in the first quarter of the fiscal year, Mehrotra is optimistic about the future and says that demand is expected to increase by about 10% in DRAM and 20% in NAND next year