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Technology Stocks : Micron Only Forum
MU 237.16+4.6%Dec 5 9:30 AM EST
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To: IceShark who wrote (25446)12/15/1997 9:32:00 PM
From: GuinnessGuy   of 53903
 
DWW et al,

Given the portion of MU's earnings below can anyone tell me how they can infer that there were any significant manufacturing efficiencies achieved during the quarter. The way I figure it you have:

(1-0.25)*0.44=0.33 or 33% expected gross margin without any improvement in manufacturing efficiencies. So they managed to beat 33% by one whole percentage point! If you ask me I'd say they have really stalled out in terms of lowering costs. I wonder if they have yet to realize the lion's share of the cost benefit of shrinking line widths to the 0.25 micron level? For their sake I hope not.

MICRON TECHNOLOGY, INC., REPORTS EARNINGS FOR THE FIRST QUARTER OF FISCAL 1998...................

[irrelevant portions of release omitted]
"The Company experienced an approximate 25% decrease in average selling price per megabit on semiconductor memory comparing the fourth quarter of fiscal 1997 to the first quarter of fiscal 1998, following a 75% decline for fiscal 1997. Pricing for semiconductor memory products continues to experience downward pressure.

The gross margin on semiconductor products declined from 44% in the fourth quarter of fiscal 1997 to 32% in the first quarter of fiscal 1998 as manufacturing efficiencies achieved on the 16 Meg DRAM countered the impact of the first quarter price declines."

Craig
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