The company announced a host of cost-cutting measures, including a 10 per cent workforce reduction, aimed at helping it weather a rapid drop in revenue.
Micron also projected a steep sales decline and a wider loss than analysts had estimated for the current quarter.
Micron Chief Executive Officer Sanjay Mehrotra said that the industry is experiencing its worst imbalance between supply and demand in 13 years.
Inventory should peak in the current period, then decline, he said.
Customers will move to more healthy inventory levels by about the middle of 2023, and the chipmaker's revenue will improve in the second half of the year, Mehrotra said.
"Profitability will be challenged throughout 2023 because of the oversupply that exists in the industry," he said in an interview. "The rate and pace of the recovery in terms of profitability depends on how fast supply is brought into line."
Micron, which had already announced factory output reductions, is cutting its budget for new plants and equipment, and now expects to spend from $7 billion to $7.5 billion for the fiscal year, a decline from an earlier target of as much as $12 billion.
The company is slowing the introduction of more advanced manufacturing techniques and predicts that spending on new production will fall throughout the industry.
The company has suspended share repurchases, is cutting executive salaries and will skip companywide bonus payments, executives said on a conference call after its results were released.
Micron said sales will be about $3.8 billion in the fiscal second quarter. That compares with analysts' average estimate of $3.88 billion, according to data compiled by Bloomberg. In the three months ended Dec. 1, Micron's revenue declined 47 per cent to $4.09 billion.