Micron Tech Shifts Structure as Communication-Chip Demand Rises
11/15/00 10:59:00 AM
Source: Bloomberg News
Boise, Idaho, Nov. 15 (Bloomberg) -- Micron Technology Inc., the biggest U.S. maker of computer-memory chips, said it will consolidate its corporate structure as a growing chunk of sales come from communication-device manufacturers.
The chipmaker will realign into two business units: one covering everything it makes for computers and another for networking and communications, Vice President Mike Sadler said during a meeting with analysts. Previously, the company had a different group for each of its products.
Micron shares have lost 63 percent of their value since hitting a high of $97.50 in July as personal-computer makers like Dell Computer Corp. predict lower-than-expected sales, prompting concern that demand is slowing during the crucial holiday period. Though Micron still expects most of its sales to come from PCs in fiscal 2001, demand for communications gear is growing faster.
''This (new structure) will allow us to put more focus on the customers,'' Sadler said at the meeting, which was broadcast over the Internet. The Boise, Idaho-based company is telling employees about the changes this week, he said.
Micron sells dynamic random access memories, the main memory chips in PCs; flash memory, popular in cell phones and electronic organizers, because it holds data when machines are turned off; and memory chips used in networking switches and routers.
The stock rose $2.50 to $35.88 in midafternoon trading.
Utah Plant
Micron said it is working on a plant to build chips on larger, 12-inch wafers, rather than the industry standard 8 inches. That new technique puts more than twice as many chips on each wafer, cutting production costs.
The Lehi, Utah, factory will make prototypes on the bigger wafers by the end of next year, Chief Executive Steve Appleton said. Analysts had predicted a late 2001 or early 2002 start.
Officials haven't yet decided how many chips the plant should produce. It could yield 5,000 to 10,000 wafers each week, and a decision should come in three or four months, they said.
DRAM prices have fallen by more than 50 percent in the past three months, crimping Micron's profit and raising questions about when PC demand will recover enough and whether additional chip capacity is really necessary.
''We want to make sure the market needs the product,'' Appleton said. |
