What's going on?

Late last week, microchip-maker Micron warned investors that this quarter�s profit would be lower-than-expected � and they didn�t care for the flavor of its stock, which fell 9% on Friday.

What does this mean?

Analysts had cautiously but correctly forecasted Micron�s revenue for this quarter, but they were too optimistic about the company�s profit. Micron sells its chips globally, including a substantial amount to China. But that means its earnings are at the mercy of the country�s ongoing US trade war, not to mention America�s ban on its companies� sales to Huawei (the chipmaker�s requested, but not yet received, an exemption).

Micron did mention it�d seen an increase in new orders, but it cautioned investors not to get carried away: buyers could be hoarding more than they need now, which might leave a gap in future orders.

Why should I care?

For markets: Chipmakers� wild ride continues.

Micron�s stock has climbed around 50% this year � rising alongside other chipmakers globally � thanks to new smartphones from Apple and Google buoying demand and higher product prices boosting profits, as well as higher hopes for a 5G rollout. But investors emptied their bags of chips on Friday, selling off shares of Micron�s global peers � including Infineon, one of Europe�s largest chippies. The industry is globally connected: it takes over 200 suppliers from 43 countries, for example, to make an iPhone � so if one chipmaker is cut, it�s likely several will bleed.

Zooming out: Chips �n� dips.

Since chips are used in everything from cell phones to cars, chipmakers� boom and bust cycles are largely dependent on global economic growth. Their financial performance and forecasts, then, signal the direction of growth � particularly early in economic growth cycles, when they tend to see the biggest benefit. Some analysts on Friday advocated buying Micron and other chipmakers� stocks: despite the worldwide economic slowdown, they believe the companies are currently in a dip � probably not the guacamole kind � and that the only way is up.