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

To: phbolton who wrote (45097)	4/16/1999 4:04:00 PM
From: DJBEINO	Respond to of 53903

Editorial: Micron could be Japan's biggest DRAM producer in '99 By Jack Robertson Electronic Buyers' News (04/16/99, 11:20:48 AM EDT) Guess who'll be the largest DRAM producer in Japan by the end of the year? Did you say KMT Semiconductor? Well, it could be true. The Kobe Steel joint venture, in which Micron Technology Inc. picked up a partnership by acquiring Texas Instruments' memory business last year, is poised to outpace many of its fellow DRAM vendors in 1999, according to a report issued last month by financial analysts Morgan Stanley Dean Witter & Co. If you're surprised by this latest twist in the erratic Japanese DRAM market, you have a lot of company. But the Morgan Stanley Dean Witter report said that while other Japanese DRAM companies are cutting back, KMT is aggressively ramping up production. Using Micron's new 0.21-micron wafer process, KMT's monthly output of 64-Mbit SDRAMs is expected to jump from 4 million currently to 10 million by September and to 15 million by year's end. That would be 50% higher than the output of Japan's top producer, NEC, which is holding steady at 10 million to 11 million 64-meg devices a month. Now coming on line with the Micron process, KMT has boosted its yields fantastically. That allows it to follow Micron's strategy: to drive down per-chip costs by spreading expenses over a vastly larger number of DRAMs. The other DRAM makers in Japan have far lower production rates and continue to lose money big-time. And in its former life as a TI joint-venture operating under the name of KTI Semiconductor, KMT was no different-down $90 million in its first fiscal half, ended Sept. 30, 1998. But after Micron replaced TI and brought in its higher-yield technology, KMT made a small pretax profit of about $8 million in the fiscal year ended March 31, 1999. The rest of Chip Japan Inc. is now shunning unprofitable 64-meg DRAMs like poison ivy and turning to next-generation memory chips it hopes will bring better margins. The bad news for Chip Japan is that KMT is also ramping up output of 128-Mbit DRAMs, to an expected level of 10 million chips a month next year. Micron, Samsung, and Hyundai will be pouring out oodles of 128-megs as well-potentially driving down prices unless demand for the higher-density memory explodes. The extreme irony is that the sole beneficiary of KMT's expected role as Japan's new DRAM leader is Micron. KMT's entire burgeoning DRAM output goes to the Boise, Idaho, chip maker, which can add that big influx of chips to its own skyrocketing production to further its assault against its Japanese rivals. Put another way, by year's end, most DRAMs produced in Japan will be Micron's. What a reversal from 1986, when Japanese chip makers chased most U.S. DRAM vendors out of the business. ebnews.com