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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Duker who wrote (31270)	7/2/1999 6:03:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

More news of a current DRAM glut: Citing DRAM glut, Micron offers OEMs price-cutting deals By Jack Robertson Electronic Buyers' News (07/02/99, 12:30 p.m. EDT) Confronted with nearly six to seven weeks' worth of inventory, DRAM maker Micron Technology Inc. has been forced to offer special price-cutting deals with several major PC OEMs. Micron chairman, president, and chief executive Steven R. Appleton two weeks ago conceded to the financial community that by the end of its second fiscal quarter, DRAM inventory “had grown by a couple of weeks.” “At this time of major DRAM oversupply in the market, we're trying to spur demand by increasing the amount of main memory in the fastest-growing segment of the PC market,” said Jeff Mailloux, Micron's DRAM marketing manager.At the end of its first fiscal quarter, Micron carried one month of DRAM inventory. But Micron' s DRAM bit output increased 17%, while shipments rose only 8%, bringing its DRAM inventory to worrisome levels. A spokeswoman confirmed that Compaq Computer Corp. had signed “an incentive package” with Crucial Technology Inc., Micron's DRAM module arm, to increase the main-memory content of its low-end Presario PC line from 32 Mbytes to 64 Mbytes. Similar offers had been given to other OEMs to try to increase memory density of sub-$1,000 PCs, she said. “Micron is trying to get rid of a big level of inventory. Special pricing deals are one way to try to do this,” said Sherry Garber, analyst at Semico Research Inc., Phoenix. Micron created its DRAM surplus earlier this year when it began to aggressively ramp production. In fact, analysts estimate that the company can be pumping out as much as 47 million 64-Mbit DRAMs a month. That inventory overhang, indeed, casts a major cloud over the market, they said. “The major players appear to be increasing production at a time when the market is already glutted,” said A.A. LaFountain III, analyst with Needham & Co., New York, who believed other DRAM producers probably were accumulating inventory as well, although perhaps not as much as Micron. Without fingering Micron, Bart Ladd, assistant general manager of memory products at Santa Clara, Calif.-based NEC Electronics Inc., said, “We would hope that any company with a large amount of inventory would try to work that down responsibly.” Observers said Micron's inventory buildup is largely due to the company's aggressive die shrinks at both its own Boise, Idaho, fabs and the plants acquired from Texas Instruments Inc. Micron previously said its total DRAM output will be doubled later this year when the acquired TI fabs fully come online with upgraded 0.21-micron processes. The Micron spokeswoman claimed the inventory increase also reflected a move to broaden the company's DRAM product mix, bloating overall stock. Despite the arrangement with Compaq, it remains uncertain whether Micron's price-cutting incentives will prompt PC makers to double the amount of main memory in sub-$1,000 PCs, LaFountain said. edtn.com