So much for the muted downturn that Micron Technology's (NASDAQ:MU) management has been calling for. PC DRAM contract prices will be down a whopping 30% in the first quarter, according to analysis by DRAMeXchange. Inventory levels are still high, offering little hope of a reversal anytime soon.

How bad is the DRAM market right now? The first-quarter pricing decline is the worst since 2011. A shortage of low-end CPUs is exacerbating the problem, eliminating an avenue for demand growth. "The overall market has thus entered freefall, meaning that large reductions in prices aren't going to be effective in driving sales," according to DRAMeXchange.

In other words, about as bad as it gets.

Check out the latest earnings call transcript for Micron Technology.

Investors may be in for a shock

Micron, which manufactures both DRAM and NAND memory chips, will report its fiscal second-quarter results on March 20. It already wasn't going to be pretty. The midpoint of Micron's guidance calls for revenue to drop by 18% compared to the prior-year period. Adjusted earnings per share are expected to tumble by 61%, the result of sluggish demand and prices dropping faster than Micron's per-bit costs.

Micron's results may come up short of its pessimistic guidance, but its outlook will pose the biggest problem for the stock. Shares of Micron have rallied this year, partly due to the hope that the company will turn the corner sooner rather than later. That now appears unlikely. Given the severity of the price declines in the DRAM market, this downturn could be just as bad as downturns of the past.

Analysts at Susquehanna are expecting Micron to whiff on its outlook. With chip pricing below expectations, analyst Mehdi Hosseini sees excess inventory keeping margins depressed through the second half of the year. Hosseini is neutral on the stock, but he expects Micron's outlook to come in far below the consensus.

Micron stock is not cheap

Shares of Micron look tantalizingly cheap. The stock trades for less than four times fiscal 2018 adjusted earnings and around 5.3 times the consensus analyst estimate for fiscal 2019 adjusted earnings. But that consensus estimate is almost certainly too optimistic. Exactly where Micron's earnings bottom out remains to be seen.

It could be squarely in positive territory if demand picks back up later this year, or it could be in negative territory if this downturn is like previous downturns. Micron posted net losses in fiscal 2009, 2012, and 2016.

Relative to tangible book value, which is a useful metric to look at historically for a commodity manufacturer like Micron, the stock is still well above the lows it typically plumbs during downturns. Shares currently go for around 1.4 times tangible book; that ratio has bottomed out below 1 in each of the past two downturns.

This downturn in the DRAM market doesn't look "muted" or "dampened" at all. It looks like the worst downturn in a long time. Micron investors should brace themselves for a rough earnings report later this month.