Micron cuts kit spend on ‘slight’ profit
Investing $300m less on new equipment while DRAM demand still slow
US Dramurai Micron Technology yesterday cut is proposed spending on new chip-making equipment and facilities after revealing it had made a profit - just - for its most recently completed fiscal quarter.
For the three months to 1 March - Micron's second quarter of the current fiscal year - the company recorded sales of $1.051 billion. On the back of that, it was "slightly profitable". Micron didn't put a figure to "slightly" - that will come next Monday when the company issues its results in full.
They were due yesterday. The delay arose after Micron's Web and PC maker subsidiary was forced to reschedule the release of its own figures to tomorrow. Lost the office calculator, did you, guys?
Whatever "slightly" means in financial terms, Micron has been inspired to cut its capital spending by $300 million from $2.3 billion, a cut of 13 per cent. The company said that computer makers have now pretty much used up their memory stockpiles - built up in anticipation of high sales at the tail end of 2000, sales that largely never materialised - and have started buying memory again.
However, with PC sales still sluggish, their own demand for memory remains low. In addition, Micron said, wireless, telecom and networking equipment makers still have large memory stockpiles to work through.
$1 billion of Micron's kit budget has already been spent, said company chairman Steve Appleton, shifting to 0.15 micron process technology. Around 30 per cent of all the wafers the company is now punching out are fabbed at 0.15 micron - Micron expects that figure to rise to 50 per cent by the end of the fiscal year. ®