Micron Tech Says Memory Chip Shipments Rising, Prices Stabilize
Bloomberg News
July 30, 1998, 5:34 p.m. PT
Micron Tech Says Memory Chip Shipments Rising, Prices Stabilize
Boise, Idaho, July 30 (Bloomberg) -- Micron Technology Inc.,
one of the largest memory chip makers, said shipments of the
semiconductors are rising and prices have stabilized.
The price of 64-megabit dynamic random access memory, or
DRAM, chips has leveled off above $8 apiece, said Micron Vice
President Kipp Bedard.
Micron needs stronger sales and stable chip prices to return
to profitability. Because of technology advances, the company
will be able to produce a 64-megabit DRAM for $5 to $6 before the
end of the year,, Bedard said.
''We've seen some tick up in pricing,'' Bedard said at the
BancAmerica Robertson Stephens Semiconductor Conference in San
Francisco. ''Unit volume is definitely increasing.''
About half of all silicon wafers in Micron's plants are
being used to make chips that use 0.21 micron technology. The
measurement refers to the microscopic space between features on a
semiconductor chip. The smaller measurement means Micron can get
more chips out of a silicon wafer, lowering its costs.
A two-year slump in prices has prompted many DRAM
manufacturers to cut investment in new factories. Bedard said he
expects companies to spend $5 billion worldwide this year on new
chip plants and refurbishing older ones, down from $18.5 billion
in 1996.
Also boding well for Micron is the fact that personal
computer makers are using more DRAM chips in every PC this year,
Bedard said.
Shares of Micron fell 1/8 to 7 7/8. The stock has declined
18 percent so far this year.
Earnings Pressure
On June 18, Micron said it had a loss of $106.1 million, or
50 cents a diluted share, in the quarter ended May 28, compared
with net income of $96.8 million, or 45 cents, in the year-ago
quarter. Analysts had expected Micron to lose 43 cents a share in
the quarter, according to IBES International Inc.
Sales fell 37 percent to $609.9 million from $965.0 million.
Micron is losing money because rivals in South Korea and
elsewhere built a slew of new factories after prices for dynamic
random access memory chips skyrocketed in 1994. Now there are too
many plants pumping out the devices. DRAMs are the most common
memory chips used in personal computers and other devices.
''We're expecting red ink through 1999,'' said Jim Handy, an
analyst at Gartner Group's Dataquest.
Prices for 16-megabit DRAM, the predecessor to 64-megabit
chips, have fallen to less than $2 apiece from more than $8 a
little more than a year ago. Still, Micron can make the chips for
far less than nearly all of its rivals.
Boise, Idaho-based Micron is one of the largest DRAM makers
in the world, along with Samsung Electronics Co. and LG
Semiconductor Co., of South Korea. Samsung is the world's largest
DRAM maker, while Micron and Texas Instruments Inc. are the two
largest U.S.-based DRAM makers. |
