What happened 

The share price of Advanced Micro Devices (AMD -4.24%) fell today after Micron Technology said that it's cutting back its chip supply because of slowing demand. 

That sent semiconductor stocks sliding today and resulted in AMD falling 5.3% as of 3:15 p.m. EST. 

So what

Micron said in a statement today that it is reducing its chip production by 20% compared to last quarter and is considering other capital expenditures cuts, saying that "Recently, the market outlook for calendar 2023 has weakened." https://investors.micron.com/news-releases/news-release-details/micron-announces-further-actions-address-market-conditions 

Micron's CEO Sanjay Mehrotra added that the company will "continue to monitor industry conditions and make further adjustments as needed." https://investors.micron.com/news-releases/news-release-details/micron-announces-further-actions-address-market-conditions

The company's comments spooked semiconductor investors today and caused AMD's share price to decline, reversing some of the gains the company had made over the past two days.

Investors are concerned that any slowdown Micron is experiencing could point to a decline in chip sales for other companies.

Now what 

Today's announcement by Micron shows just how volatile the semiconductor industry still is right now. After suffering from supply chain issues and rising costs over the past two years, some chip companies are still facing macro headwinds that are stifling their growth. 

AMD experienced some of that slowdown in its third-quarter results when the company said that slowing PC demand hurt the company's sales. 

All of this doesn't mean that AMD won't end up being a good long-term investment, but the latest news shows that investors should expect some near-term share-price swings in this sector.