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

To: Skeeter Bug who wrote (25596)	12/17/1997 7:17:00 AM
From: Kathleen capps	Read Replies (3) \| Respond to of 53903

The reason why MU traded up: Boise, Idaho, Dec. 16 (Bloomberg) -- Micron Technology Inc. shares rose 4.7 percent amid speculation that the company will be among the most profitable computer memory-chip makers once prices for its products end their slide. Micron's rise surprised some analysts because the company said late yesterday that fiscal first-quarter profit fell a greater-than-expected 53 percent, hurt by tumbling prices for its dynamic random-access memory, or DRAM, chips. Micron shares rose 1 1/16 to 23 9/16 in trading of 6.85 million. The increase in Boise, Idaho-based Micron's share price shows investors think the company is poised to profit greatly once DRAM prices recover, which could happen sooner than expected, analysts said. ''These guys ship more than 80 million DRAMs in a quarter,'' said Scott Nirenberski at Deutsche Morgan Grenfell in San Francisco, who rates the stock ''accumulate.'' ''Any little price increase helps a lot.'' Micron said yesterday the average selling price per megabit of its memory chips fell 25 percent from the fiscal fourth quarter ended Aug. 28. It also said prices are still falling and show no signs of stopping. Approaching 'Equilibrium' Things may improve for Micron and Texas Instruments Inc. --the only two U.S. DRAM makers -- after the economic crisis in Asia hit South Korea, the world's largest maker of DRAMs. ''The Koreans are in a lot of trouble,'' said Kipp Bedard, vice president of Micron, which is the world's lowest-cost DRAM producer. Korean companies could see sales growth slow within a few years as the won's 31 percent decline over the past month makes it more expensive for them to import equipment they need to upgrade factories that would produce faster chips, analysts said. ''They will probably be late in moving to the next generation because of delays in plant investments,'' said Jim Handy, a memory-chip analyst at Dataquest in San Jose, California. ''It's too early to see if the South Korean manufacturers are going to go down in market share or just end this upward spiral and go flat.'' Either of those things would be good news for Micron and Texas Instruments, which have fought an uphill battle against the South Koreans as they added chip capacity, pushing down memory prices. Over the past month Samsung Electronics, the world's largest memory-chip maker, said it would indefinitely postpone a plan to invest $756 million in a U.K. plant and $500 million in Texas. And Dongbu Group, a Korean conglomerate, said it might delay construction of a $1.7 billion, 256-megabit DRAM plant it was building through a venture with International Business Machines Corp. ''This could be a positive development for our company,'' said Vladi Catto, chief economist for Texas Instruments. ''This is a big plus because it's going to stabilize memory prices and eventually push memory prices back up. It's going to cause equilibrium between demand and supply.''