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

To: IceShark who wrote (48028)	9/7/1999 1:40:00 AM
From: DJBEINO	Read Replies (1) \| Respond to of 53903

Micron, Infineon Sign Long-Term Chip Pacts in Japan, Paper Says Tokyo, Sept. 7 (Bloomberg) -- Micron Technology Inc. of the U.S. and Infineon Technologies AG of Germany have signed long- term contracts to provide computer memory chips to Japanese electronics companies including NEC Corp. and Fujitsu Ltd., the Nihon Keizai newspaper said, without citing sources. Micron, the biggest U.S. producer of memory chips, and Infineon, a spin-off of Siemens AG, will begin supplying dynamic random-access memory chips under the agreements as early as next month, the newspaper said. Local representatives of both companies declined to comment on the report. Japanese electronics companies including NEC and Fujitsu are cutting their output of DRAMs, typically used to store data in personal computers, to produce more sophisticated chips for digital applications such as mobile phones. That shift, and falling prices for PCs, have compelled the computer divisions of those companies to look more to foreign suppliers like Micron. ''The PC makers are under a lot of pressure with falling end- product prices, so there may be a little more incentive to line up an additional supplier and put competitive pressure on some of your other suppliers to make sure that you get good pricing on DRAMs,'' said Steven Myers, an analyst at Jardine Fleming Securities Japan Ltd. The Nihon Keizai newspaper estimated supply agreements by Micro and Infineon may be worth 50 billion yen ($455 million) in annual sales, increasing the foreign share of Japan's DRAM market to 50 percent from 30 percent by 2001. Micron Push Boise, Idaho-based Micron, which reported its fifth quarter loss in six quarters in June, is struggling to remain profitable in the glutted global DRAM market by improving yields on chip production and expanding sales in Asia. A year ago it took a 25 percent stake in a chipmaking joint venture with Kobe Steel Ltd. which is set to overtake NEC this month as Japan's largest producer of DRAMs. ''Micron strategically has little besides the memory chip business,'' said Jardine's Myers. ''It can't get out of memory, because that's all it does. And so it's strategic objective is to do them in some way that is better.'' Formerly the semiconductor division of Siemens, Germany's largest electronics company, Infineon was established in April as a wholly owned subsidiary. It ranks tenth in the world semiconductor industry, with sales of 6.8 billion Deutsche marks in 1998. A spokesman for Fujitsu, Japan's biggest computer maker, said the company has concluded no long-term agreement with either overseas supplier. Toshiaki Koike said Fujitsu has used their memory chips in the past and will continue to consider doing so on a product-by-product basis. NEC spokesman Aston Bridgeman said Infineon has been providing DRAMs since last September under a licensing pact, but has no agreement with Micron. The global memory chip market, which declined 19 percent in 1997 and 21 percent last year, will bounce back 19 percent this year as more consumers buy PCs to get on the Internet, the Semiconductor Industry Association forecast in June. Shares in Fujitsu, which plans to stop DRAM production by the end of 2001, fell as much as 1.7 percent to 3,400 yen. NEC's stock rose as much 2.5 percent, to 1,825 yen.