(Reuters) – Reminiscence chip agency Western Digital Corp (NASDAQ:) forecast fourth-quarter income under Wall Avenue estimates and a much bigger current-quarter loss, signaling that reminiscence chip demand will take longer to get well as cloud spending additionally shrinks.

The corporate’s shares fell about 1% in prolonged buying and selling.

Chipmakers throughout the board together with Intel Corp (NASDAQ:) have stated cloud spending is weakening.

Seagate Know-how Holdings, which makes onerous disks for storage like Western Digital, final month stated it was seeing a “extra elongated buyer stock correction” and that it expects demand restoration to start solely in direction of the tip of 2023.

The reminiscence business, which was the primary to flag a chip provide glut final yr, was slammed by falling chip costs because of the mixed impression of falling demand for electronics and oversupply.

Whereas reminiscence chipmakers have been reducing manufacturing to alleviate oversupply and prop up reminiscence chip pricing, a weak world financial outlook has clouded the hopes for a faster restoration.

Western Digital expects fourth-quarter income between $2.40 billion and $2.60 billion. Analysts count on income of $2.86 billion, based on Refinitiv knowledge.

On an adjusted foundation, the corporate expects a fourth-quarter loss between $1.90 per share and $2.20 per share, in contrast with analysts’ estimates of a lack of $1.22.

Western Digital, which is exploring the splitting of its flash-memory and hard-drive enterprise after activist investor Elliott Administration pushed for a separation, stated income from these models within the third quarter fell about 42% and 30%, respectively, from a yr earlier.

Cloud phase income within the third quarter fell 32% to $1.21 billion.

Nevertheless, Western Digital reported third-quarter income of $2.80 billion, beating estimates of $2.70 billion.

(This story has been corrected to say the forecast is for greater fourth-quarter loss, not revenue under estimates, in paragraph 1)