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

To: TREND1 who wrote (25120)	12/12/1997 7:43:00 PM
From: Ken Muller	Respond to of 53903

Larry: "I've got a feeling we're not in Kansas anymore" Happy Holidays, Ken

To: TREND1 who wrote (25120)	12/12/1997 9:26:00 PM
From: TREND1	Read Replies (1) \| Respond to of 53903

Micron expansion slowed by tester shortage By Jack Robertson JUST SENT OUT TO MEMBERS OF EMAIL LIST !!! NEW YORK -- A DRAM testing logjam at Micron Technology Inc. has been causing a severe curb on the U.S. memory firm's production rampup in the current quarter, according to financial analyst reports based on a recent closed-door company briefing. The analysts also said Micron officials told them the firm's targeted capital investment in 1998 may be scaled back to $700 million to $800 million from the originally projected $1 billion -- especially if the DRAM price blood-letting doesn't ease off next year. Dan Scovel, analyst with Fahnestock & Co., New York City, said Micron officials told analysts that the firm had failed to keep up its torrid DRAM production growth, dropping from a doubling of output earlier this year to only a 10% growth this quarter. The drop was not related to crashing DRAM market prices, but resulted from lack of testing capacity to handle the production increases, Scovel said. The testing logjam is expected to be broken next March when Micron's new test center opens at Lehi, Utah, the first operation to start work at Micron's huge new fab facility there. The temporary lower Micron production ramp is good news for Asian DRAM competitors, who unanimously blamed the U.S. firm's doubling of output earlier this year as a major factor in over-saturating the global market and fueling the pricing firestorm. The analysts, however, said Micron expected to resume its steep production build up in the rest of 1998, especially as the firm switches entirely to quarter-micron wafer processing. Micron officials were reported for the first time as putting the company as No. 3 global DRAM producer ranked by revenue, with a 10% world share. The analysts said Micron is already producing more 16-Mbit synchronous DRAMs than EDO versions and by the end of next year SDRAMs will account for 100% of 16-Mbit output. Robert Toomey of Piper Jaffray said Micron predicted a continued growth in DRAM demand in 1998 of 50% to 90% over this year. "U.S. inventories of DRAMs are very thin now, with customers working on an estimated 2-to-3 days of inventory. Steve Appleton, Micron chairman, told the closed-door session that the wide-open chip expansion by Korean competitors may now be curbed due to that country's banking crisis. He told the group that the ability of Korean and some other Southeast Asian chip makers to raise capital for new fabs has been reduced. He predicted the chip industry would start to see fab delays and stretchout in equipping new proeduction lines. Analyst Toomey, however, said any impact from the Korean's cutting back expansion plans would not show up for several years. "In the interim, the Koreans and Taiwanese will continue to produce to exceess, keeping pressure on spot prices in Asia, with spillover effects into the U.S. market." Raymond James & Associates, St. Petersburg, Fla., predicted that the DRAM market glut would continue through next year, with no pricing stability expected until 1999.