Micron Technology's (MU -3.78%) latest quarterly report has dashed any hopes of a turnaround in its fortunes this year, and it wouldn't be surprising to see shares of the memory specialist head lower in the short term as it tries to navigate a weak demand environment.

Though the chipmaker's fiscal 2022 third-quarter results -- released on June 30 -- turned out to be better than expected, its outlook left a lot to be desired. Micron's tepid guidance and management's comments regarding a slowdown in memory demand have sparked concern among investors about the health of the semiconductor industry.

Micron Technology's rapid growth is over

Micron's fiscal 2022 Q3 revenue increased 16% year-over-year to $8.64 billion. The company's earnings shot up 35% over the year-ago period to $2.59 per share last quarter, which was impressive considering the headwinds Micron faced going into its quarterly report. The numbers were better than analysts' expectations, but the guidance was the reason why investors pressed the panic button.

Micron expects $7.2 billion in revenue this quarter along with adjusted earnings of $1.63 per share. The chipmaker posted $2.42 per share in non-GAAP earnings on $8.3 billion in revenue in the prior-year period. So Micron's top and bottom lines are on track to significantly shrink this quarter. That came as a shock as Wall Street was looking for $2.62 per share in earnings on $9.1 billion in revenue.

Micron attributes the year-over-year drop to weak demand in key end markets, such as smartphones and personal computers (PCs). Management points out that the war in Europe, dwindling consumer spending in China, and surging inflation across the globe will hurt demand and cause Micron's customers to adjust their inventory levels, leading to lower demand.

As a result, Micron forecasts that memory demand in the second half of 2022 will fall below the company's long-term growth expectations. The weak demand will negatively impact memory prices and crush Micron's margins. This is evident from the company's non-GAAP gross margin estimate of 42.5% for the current quarter, which would be a big decline over the year-ago period's figure of 47.9%.

In all, gloomy days lie ahead for Micron Technology as weak demand will negatively impact memory prices and stifle the company's growth. Memory market research firm TrendForce estimates that the prices of dynamic random-access memory (DRAM), which produced 73% of Micron's revenue last quarter, could drop between 3% and 8% this quarter.

Micron says that it will reduce memory supply to protect profitability and will cut its capital expenditure on fabrication equipment in fiscal 2023 compared to this year. Still, there is no doubt that the chipmaker's days of rapid growth are behind it, at least for 2022.

Management points to the bigger picture

Micron CFO Mark Murphy remains confident about the company's future as his comments on the latest earnings call indicate:

Beyond the near term, we project secular growth drivers such as data center, automotive and other areas to support robust DRAM and NAND growth, and strong cross-cycle financial performance by Micron.

The company estimates that 180 zettabytes (ZB) of data could be generated by 2025, compared to 81 ZB last year. A zettabyte is equal to a billion terabytes (TBs). This massive spurt in data will create the need for more DRAM and NAND flash memory for computing and storage purposes. As a result, Micron estimates that the demand for DRAM could increase in the mid-to-high teens through 2025. NAND flash demand, on the other hand, could grow in the high-20% range over the same period.

What's more, Micron estimates that its total addressable market could be worth $330 billion by 2030, compared to $161 billion last year. Not surprisingly, analysts remain upbeat about Micron's long-term prospects, and expect its earnings to clock a compound annual growth rate of 29% for the next five years.

So savvy investors looking to buy a semiconductor stock trading at just six times earnings might want to consider buying Micron right now, but they need to be prepared for short-term weakness in order to enjoy any potential long-term gains.