Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Glenn D. Rudolph who wrote (50514)	2/14/2000 9:47:00 AM
From: Fabeyes	Respond to of 53903

from the Idaho Statesman: Micron?s expecting good profits Analysts say firm will bring in more than $280 million By Marcelene Edwards The Idaho Statesman Memory chip prices are falling again, but Boise-based Micron Technology Inc. is expected to record substantial profits this quarter. Chip prices have fallen to about $6 for a 64 megabit memory chip. That?s about half the price of late last year. But that still gives the semiconductor company about $2 a chip in income. Analysts estimate that Micron?s cost to produce each memory chip is about $4. With millions of chips sold each quarter, the profits add up. Analysts predict Micron will make more than $280 million for the second quarter ending March 2 and about $1.3 billion for fiscal year 2000, which ends in August. It would mark the second consecutive quarter of strong profits for the memory-chip maker. And that performance would provide stronger evidence of a turnaround in the market. The profits will put money in state coffers directly through corporate income tax and indirectly through personal income taxes. They also will give employees bonus checks. "The business is about to transition from an oversupply to an undersupply," said Jim Handy, a memory chip analyst with the research firm Dataquest. Micron employs about 12,000 people in Southwest Idaho. Memory chips temporarily store information in PCs and other electronic devices. As demand for the chips increases, the price is also predicted to increase. The memory chip market has seen falling prices for more than three years. Micron lost about $300 million in 1998 and 1999 because of the low chip prices. But last fall the business started to improve. Prices jumped from about $4 per chip to more than $20. Micron Technology recorded a $341 million profit for the first quarter of fiscal year 2000. Chip prices stabilized at about $12 during December and January, but fell in recent weeks. However, analysts say the price dip is only temporary. By the second half of 2000, chip prices will bounce higher and improve Micron?s profits, said Victor de Dios, an analyst with research firm de Dios & Associates. Micron Technology is able to make profits largely because it is the lowest-cost memory-chip manufacturer in the world. The company has shifted 80 percent of its production starts to use new, smaller circuits. That means the company gets more chips per silicon wafer, an 8-inch, round disk the company builds its chips on, Kipp Bedard, Micron?s vice president for corporate affairs, told analysts and investors. Chipmakers have been gradually increasing the use of smaller circuits, which lead to faster chips that consume less power. Semiconductor-equipment makers expect chips with 0.18-micron circuits to make up 80 percent of the market this year. Bedard said 5 percent of Micron?s production starts use even smaller circuits, 0.15 micron. He expects that figure to grow to 20 percent to 30 percent this summer.