The coming months will be more challenging for the companies that make memory chips, Mizuho Securities said. Analyst Vijay Rakesh downgraded Micron Technology to neutral from buy under the expectation of slowing demand and increased competition. He also slashed his price target on the stock by 25% to $56 per share from $75 per share. The new target is about 10% above Tuesday's close of $50.80. "While we may be late to the downgrade, we believe weak macro, weak consumer demand, high inventory, and continued supply growth imply more downside risk over the next 4-6 months," Rakesh wrote in a Wednesday note to clients. Wednesday's note details the latest challenges the company faces in an already difficult year. Shares of Micron are down about 48% from the 52-week high. Micron, in line with the industry, reported higher supply levels as demand for chips slides, Rakesh said. This comes as interest in products such as computers and handsets that use chips has decreased in part due to increasing inflation. On top of that, the field of memory chip makers has become more crowded with the entrance of Yangtze Memory Technologies, which was founded in 2016. Rakesh said Yangtze could match Micron's capacity by the end of 2023. Western Digital , the other major player among memory chip makers, was also downgraded to neutral for the same reasons. Rakesh cut his target on the stock by about 35% to $40 per share from $62 per share. The new target is about 12% above Tuesday's close of $35.54. Western Digital shares are down about 49% from their 52-week high. "We expect supply to continue to outpace demand for the next few quarters, keeping GMs for both MU and WDC depressed, with improvement only potentially in calendar 2H23E," he said. — CNBC's Michael Bloom contributed to this report.