Micron Technology Inc, a US chip giant, will release his second-quarter results after the close of US stocks on March 20 (early morning Beijing time).

It has been three months since the last disappointing quarterly report, and against the backdrop of the continuing downturn in the storage market this year, the American chip giant$Micron Technology Inc (MU.US) $I'm afraid it won't be easy to reverse the decline in the second quarter.

The future of the industry is worrying.

Although memory chips are expected to recover in the second half of the year, and the Philadelphia semiconductor index (Philadelphia Semiconductor Index), one of the main indicators of global semiconductor industry sentiment, has risen about 22% year-to-date, a series of signs of improved investor sentiment have pushed Micron shares up more than 27% so far this year:

But a survey by global market research firm TrendForce earlier this month showed that DRAM prices could fall by as much as 30% in the first quarter of 2019, compared with the original forecast of 25%, the biggest quarterly decline since 2011.

The latest survey of Jibang Consulting Semiconductor Research Center (DRAMeXchange) also points out that recently, DRAM inventory (including wafer inventory) has generally reached a high level of at least one and a half months. In the case of depressed demand, PC-OEM can not digest the DRAM particles of suppliers, and the overall market shows a trend of "unlimited decline".

This means that even if the original factory is willing to greatly reduce the price, it will not be able to effectively stimulate sales. If demand does not return strongly, high inventory levels will cause DRAM prices to continue to decline this year.

Against such an industry background, the expectations of other peer companies are not optimistic. In late January, NVIDIA Corp announced that its first year-on-year revenue decline in the first quarter in five years, while Intel Corp continued to cite continuing trade concerns and lowered his expectations for this year. In addition, in a report in early February, Qorvo issued guidance that was well below Wall Street's average expectations.

In addition, IC Insights's forecast shows that the annual revenue of Samsung conductor products, the world's largest manufacturer of DRAM, will also fall 20% from a year earlier, highlighting the cooling trend of memory chips, including DRAM memory and NAND flash memory.

Looking back at the company's earnings guidance for the last quarter, Meguiar's outlook for the second half of the year is a further improvement in DRAM prices. If this premise is not met, what kind of outlook will Micron use this quarter to allay investor anxiety?

Different opinions on rating

In view of the downward trend in the industry outlook, Susquehanna Financial Group, the US investment bank, said the falling price of memory chips would have a huge negative impact on Micron Technology Inc's profits and lowered Micron Technology Inc's earnings per share forecast for fiscal 2019 from $6.59 to $6.40, reiterating its "neutral" rating and maintaining its target price of $35 per share.

Earlier, Bank of America also cut its profit forecast for Micron for 2019-2021, lowering its earnings per share forecast for this year from $8.53 to $6.89. Analyst Simon Woo expects prices for the company's DRAM and NAND to fall by more than 20 per cent in the second quarter.

However, some analysts believe that Micron's current valuation is low, maintaining an optimistic view. John Pitzer, an analyst at Credit Suisse, reiterated its "overweight" rating on Micron Technology Inc on Sunday, citing the stock's low valuation and said: "recent memory shipments are much lower than consumption and the supply and demand situation is gradually improving as the US cloud computing (demand) picks up between April and May, and Micron's valuation is still attractive. "

In addition, Ruben Roy, an analyst at investment firm MKM Partners, also reiterated Micron Technology Inc's "buy" rating on Monday, advising clients to pay attention to Micron Technology Inc's long-term corporate vision, and said he would continue to take a positive long-term view of Micron and set a target price of $44 a share, given that demand for high-priced storage products will continue to grow in the coming years.