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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Carl R. who wrote (46420)	6/18/1999 2:42:00 AM
From: DJBEINO	Read Replies (1) \| Respond to of 53903

Kobe Steel, Micron JV Aims to Make Most Japan DRAMs Tokyo, June 18 (Bloomberg) -- Kobe Steel Ltd. said its joint venture with Micron Technology Inc., the U.S.'s No. 1 maker of computer memory chips, will become by September Japan's largest maker of the most commonly used computer memory chips. And by year-end it will be churning out twice as many chips as the next largest producer. Increases in production capacity at Kobe Micron Technology, a joint venture between Micron and Kobe Steel, Japan's fifth- largest steelmaker, will help it overtake NEC Corp. as the largest domestic maker of dynamic random-access memory chips, said a Kobe Steel executive. ''We will become Japan's No. 1 DRAM maker by September,'' Yukio Sakamoto, deputy vice president of Kobe Steel's electronics and information division, told Bloomberg News. ''By December we'll have double the output of any other Japanese competitor.'' KMT, established last June between Kobe Steel and Boise, Idaho-based Micron, posted a pretax loss of 14 billion yen ($116 million) in the year ended March 31, narrower than the 19.1 billion yen loss for the previous year by Kobe Steel's previous chip joint venture, with Texas Instruments Inc. of the U.S. KMT, based in Hyogo Prefecture, western Japan, returned to the black on a monthly basis in April, and maintains its forecast for pretax profit of 5 billion yen for the year ending March 2000 as it increases production of DRAM chips, said Kobe Steel's Sakamoto. KMT is boosting DRAM output while other chipmakers are trying to focus on more sophisticated logic chips. Japan's five largest chipmakers -- NEC, Toshiba Corp., Hitachi Ltd., Fujitsu Ltd. and Mitsubishi Electric Corp. -- all lost money on DRAMs in the year ended March 31 as global oversupply forced them to slash prices. The venture benefits from Micron's expertise in improving yields -- the proportion of perfect chips it can make from firing up a batch of silicon wafers, thereby reducing costs. 10 Billion Yen Goal If prices for the 64-megabit DRAM chips most commonly used as main memory in PCs continue to plunge, though, the venture's pretax profit could fall as low as 3 billion yen, Sakamoto said. ''We haven't given up our goal of 10 billion yen in pretax profit: It all depends on the market,'' said Sakamoto. The main difficulty facing KMT and other DRAM makers is falling prices for DRAM chips because of oversupply. Average spot prices, or prices for immediate delivery, for the most commonly used 64-megabit DRAM chips fell to about $5.50 in mid-May, from about $10 in late February, according to American Integrated Circuit Exchange, an information providers about computer chip prices. KMT's forecast for pretax profit of 3 billion yen is based on the assumption average prices will fall to $4 by year end. ''We think prices will stop falling soon, though,'' Sakamoto said. KMT plans to make 20 million DRAM chips a month by the end of this year, double NEC's current monthly output of 10 million chips, and Hitachi Ltd.'s target of monthly production of 10 million chips by year end. KMT estimates more than half its DRAM output by then will be 128-megabit DRAM chips, higher-density chips set to replace 64- megabit DRAMs as the memory chips in mass production. Kobe Steel shares fell 2 yen to 110.