Micron upbeat about the new year
Company to work on expansion, capital spending
idahostatesman.com
Steve Appleton
“We still believe in this business”
Katherine Jones / The Idaho Statesman
Micron recently entered the imaging chip business to create a “camera on a chip.” The micro-camera technology is what´s used in this smart phone.
• High Tech
Julie Howard
The Idaho Statesman
Micron Technology shareholders on Tuesday were reassured the company was on a solid footing, with increased capital spending planned for 2003 and expansions into the burgeoning markets of China and India.
Several hundred shareholders attended the company´s annual shareholder meeting at Micron´s southeast Boise headquarters. The theme of the meeting seemed to be reassurance that despite two years of record losses, the memory-chip firm had an aggressive plan to navigate through the remainder of the downturn.
“We have faced very difficult times,” acknowledged Micron Chairman and CEO Steve Appleton. “I want to emphasize that I think even though we´ve experienced challenges, we still believe in this business.”
The company plans to commit to the future of memory chips by spending more in 2003 despite the fact it lost more than $900 million in fiscal 2002, he said. Even though prices are at record lows, Appleton said memory chips are critical to electronics products and will continue to be important in the future.
“By 2007, every person in the world will consume 1.2 billion bits (of memory),” said Appleton, referring to the memory in electronic devices used.
Micron spent $900 million in capital expenditures in its fiscal 2002, which ended in August, with 50 percent of that on plant upgrades and 28 percent on research and development, executives reported. For 2003, the company has upped its commitment to $1 billion for capital spending, with 60 percent going into plant upgrades and 25 percent into research and development. The remaining funds are split among other ventures, including test and assembly operations.
The company´s first employee in India was hired last week, and a second office was established in China last month.
Mike Sadler, vice president of worldwide sales, said while the U.S. and Japan are large consumers, they will see only slight growth through 2005. In comparison, China is projected to double its personal computer sales over the next three years, and increase cell phone sales by 50 percent.
Sadler added that India is expected to have much smaller numbers compared to China, but would still double its personal computer consumption through 2005 and triple cell phone sales.
There were several references at the meeting to Micron´s battle with South Korean competitor Hynix Semiconductor, which is the target of the Boise company´s current countervailing duty case.
Last week, the U.S. Commerce Department agreed to launch an investigation into whether South Korean memory companies received illegal governmental subsidies. Micron has accused the South Korean government of unfairly assisting Hynix in particular, keeping the company alive as a competitor when it would otherwise have fallen into bankruptcy.
Appleton told shareholders that Hynix´s artificial survival has direct impact on Micron´s bottom line by taking away potential sales and adding capacity to a saturated market, pushing prices downward.
In a separate meeting with the media afterwards, Appleton said Micron will survive whether or not Hynix is eliminated from the industry.
“We´re hoping (the subsidies) will stop, but we´re not going to sit around for them to go out of business to save us,” said Appleton.
He added that while the current fiscal quarter, which ends this week, will show better results than the last, the next quarter — December through February — is traditionally weaker since consumers are typically restrained in buying just after Christmas.
While Appleton said there are no plans for layoffs, for the first time he acknowledged there had been job reassignments and shift changes at the company to accommodate the economic slowdown. He added he will continue to forego his $800,000 salary until the company posts a profit, and executives at the company will continue under a 20 percent pay cut that was implemented more than a year ago.
He said there are no current plans to reinstitute pay cuts to lower level employees, who were given a 10 percent pay cut last year and then had the pay cut lifted early this year.
The shareholder meeting — usually a time for a company to engage in a bit of show and tell — was a good one, according to one local couple.
At least, Tuesday´s annual meeting met the high-tech expectations of shareholders Walt and Mary Thode.
“Very impressive,” concluded Mary Thode, after the session. “Lots of audiovisual. But that´s what you would expect with a company with this sort of resources.”
Hosted on Micron´s sprawling headquarters campus, the meeting is a chance for shareholders to visit the highly secured site — although visitors were escorted directly to the auditorium under the supervision of dozens of Micron employees. Displays of some products were set up so shareholders could get a better idea of what this highly technical component company produces.
“It´s interesting to learn how many more products they make that we wouldn´t have known about otherwise,” said Walt Thode, who added he and his wife attend Micron shareholder meetings every few years to keep touch with their investment.
To offer story ideas or comments, contact Julie Howard
jhoward@idahostatesman.com or 373-6618
Edition Date: 11-27-2002
On CCMP... it too will follow the SOX which should hit 376 or so again today. The big question is not if the stock will roll over but will the index? CCMP has one hell of a chart!
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RtS |
