Micron Technology sees PCs shipping with more DRAM
By Ismini Scouras
Electronic Buyers' News
(07/28/99, 05:51:16 PM EDT)
PC main memory content is beginning to rise in systems across the board, helping to dry up some of the excess DRAM inventory in the market, a Micron Technology Inc. executive said today.
Major PC OEMs are increasingly building their $600 boxes with 64 Mbytes of memory, twice what most low-cost systems included for much of the past year, said Kipp Bedard, Micron's vice president of corporate affairs, at the BancBoston Robertson Stephens Semiconductor Conference in San Francisco.
"That has caused a ripple effect into other categories," Bedard said. The $900 PC, for example, is now being equipped with 72 Mbytes of memory vs 64 Mbytes.
Micron helped drive PC main memory content by joining forces with Compaq Computer Corp. just a month ago. Micron's memory module division, Crucial Technology, began to provide memory upgrades for Compaq's low-end Presario systems, boosting the memory content from 32 Mbytes to 64 Mbytes. The advent of Windows 2000 next year will push the threshold to 128 Mbytes, Bedard said.
In correlation with the increase in PC main memory-and fewer suppliers in the market-DRAM prices are increasing, he said. Average selling prices are expected to climb into the $5 to $5.25 range in August from $4.50 in July.
Although it appears the DRAM market is exhibiting another slight upturn, Micron's announcement last month that it was sitting on six weeks of inventory put the market into perspective. Bedard claims that the company has made "significant progress" in burning off some of that inventory.
But it won't be until the end of the year until Micron's losses dissipate, said Dan Niles, an analyst with BancBoston Robertson Stephens. "The company is still below break even," Niles said.
Despite the losses, Micron is moving ahead with aggressive capital spending plans this year and next. Flush with $1.7 billion in cash, Micron's capital expenditures will amount to $2 billion through 2000. That doesn't include Micron's joint venture fabs in Singapore and Japan; $300 million will allocated toward each facility, Bedard added.
"We have a lot of spending to do to prepare [for the next upgrade cycle]," he said.
Micron is moving ahead with plans to manufacture high-speed Direct Rambus DRAM and DDR DRAM, but the company is still unsure how the market is going to play out. "We'll take the lead from our customers," Bedard said.
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