(Bloomberg) — Micron Technology Inc. (MU), the largest U.S. maker of computer memory chips, is facing its biggest market share decline in more than four years after its revenue forecast fell short of forecasts due to sluggish demand for smartphones and PCs.

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Revenue will be about $7.9 billion in the second fiscal quarter, which runs through February, the company said in a statement Wednesday. This compares to an average analyst estimate of $8.99 billion. Earnings will be no more than $1.53 per share, net of certain items, well below the forecast of $1.92.

Although Micron is seeing strong orders for artificial intelligence components, the company still faces weak demand from makers of phones and PCs – two markets that consume most of its chip volume.

Micron shares, up 22% this year through Wednesday’s close, plunged 15% in premarket trading before the New York Stock Exchange opened Thursday. If the decline continues, it will be the largest intraday decline since March 2020.

“While consumer-facing markets are weaker in the near term, we expect a return to growth in the second half of our fiscal year,” Chief Executive Officer Sanjay Mehrotra said in the statement.

In the fiscal first quarter ended Nov. 28, revenue rose 84% to $8.71 billion. Excluding certain items, earnings were $1.79 per share. Analysts had forecast sales of $8.71 billion and a profit of $1.76 on average.

The company said data center-related revenue increased 400% year-over-year in the quarter. This unit now accounts for more than half of the company’s total sales. Still, the increase wasn’t enough to offset weak orders from makers of consumer devices, Micron said.

In this area, customers have worked through a backlog of inventory.

“We are now seeing a more significant impact of customer inventory reduction,” Micron said in an investor presentation. “We expect this adjustment period to be relatively short and expect customer inventory levels to reach healthier levels by spring.”

The company forecasts the PC market will grow about 5% in 2025, with most of the expansion occurring in the second half of the year. It has been noted that owners of the devices are updating them more slowly than expected.

Micron said its wireless division suffered a 19% sequential decline due to inventory depletion. Automotive and industrial sales also fell.

For the 2025 fiscal year, the chipmaker expects to spend $14 billion on new plants and equipment. This amount includes a reduction in the planned expenditure for the new production of memory chips.

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