The weakness in the equipment and semiconductor stocks today
is due to an earnings warning by Microchip and due to the following
press release from Micron technology. As I noted in my last posting,
the DRAM market is expected to lag the logic market in terms of new
plants being constructed and new equipment being bought. Micron
is the only pure-play memory producer that I am aware of in the U.S.
TI also sells some memory along with other products in a more
diversified product line-up. Because Lam sells a disproportionate
amount of its product to U.S. companies, it will not be hurt by the
DRAM/SRAM weakness as much as the 9% drop in its stock price
today suggests (as I am writing this). It is hard to predict the short-term
performance of a volatile stock, but I would guess that LRCX will
rebound nicely after the market reaction to the recent news (and the
inevitable downgrades that should follow) has been digested. Here
is the MU press release:
February 26, 1996, Boise Idaho -- Micron Technology, Inc., (MTI)
today announced it intends to complete the exterior work on
the Lehi wafer fabrication facility, but will not outfit or equip the
facility until market conditions warrant. The target completion date
continues to be within three to five years at a cost of $2.5 billion,
but the start-up date will remain open and contingent upon market
conditions. "To date, we have spent approximately $400 million on
the project. We remain committed to the Utah facility and appreciate
the flexibility of local officials and subcontractors in responding to
our changing needs," said Steve Appleton, Micron's Chairman,
President and CEO. "We believe the best approach is to be fiscally
conservative, focusing on research and development, and reducing
costs through efforts such as our six- to eight-inch wafer conversion."
MTI employees hired for Lehi will be offered positions at the
Boise site, with relocation costs paid by the Company. The
Company is working with city, county,and state officials to revise
the timing of infrastrucure improvements in support of the project.
Micron Technology, Inc., and its subsidiaries manufacture and
market DRAMs,very fast SRAMs, other semiconductor components,
board-level products, and personal computer systems. Micron's
common stock is traded on the New York Stock Exchange (NYSE)
under the symbol MU. |
