Storage device firm Western Digital Corp forecast fourth-quarter revenue below Wall Street estimates and a bigger current-quarter loss, signalling that memory chip demand will take longer to recover as cloud spending also shrinks.
The company's shares fell about 1 per cent in extended trading.
Seagate Technology Holdings, which makes hard disks for storage like Western Digital, last month said it was seeing a "more elongated customer inventory correction" and that it expects demand recovery to begin only towards the end of 2023.
The industry, which was the first to flag a supply glut last year, was slammed by falling chip prices due to the combined impact of falling demand for electronics and oversupply.
While storage makers have been cutting production to alleviate oversupply and prop up memory chip pricing, a weak global economic outlook has clouded the hopes for a quicker recovery.
Western Digital expects fourth-quarter revenue between US$2.40 billion and US$2.60 billion. Analysts expect revenue of US$2.86 billion, according to Refinitiv data.
On an adjusted basis, the company expects a fourth-quarter loss between US$1.90 per share and US$2.20 per share, compared with analysts' estimates of a loss of US$1.22.
Western Digital, which is exploring the splitting of its flash-memory and hard-drive business after activist investor Elliott Management pushed for a separation, said revenue from those units in the third quarter fell about 42 per cent and 30 per cent, respectively, from a year earlier.
Cloud segment revenue in the third quarter fell 32 per cent to US$1.21 billion.
However, Western Digital reported third-quarter revenue of US$2.80 billion, beating estimates of US$2.70 billion.
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