Micron posts $301m loss
Will no one buy our DRAM?
DRAM maker Micron released punishing Q3 results yesterday as write-offs of unsold memory chips took resulted in a loss of $301 million, 50 cents a share.
The company also said its market share had fallen to 25.7 per cent, down from 27.1 per cent in Q1 2001.
Micron's sales totalled $818 million, down 24 per cent on the previous quarter. Shipments were up 20 per cent, but the company said its average selling price per megabit had fallen 35 per cent, wiping out the gain from the increase in sales.
All of which led to an operational loss, widened by a $260 million inventory write-off and a $12 million charge incurred by sale of Micron's PC business.
Micron has been cutting capacity to bring production into line with demand, and the company hinted there was still some way to go to match supply to demand. "It won't take a whole lot of additional capacity to come off line to bring DRAM supply into balance with demand," said Micron president and chairman Steve Appleton. Analysts expect Q3 to see the PC market begin to revive, which should boost demand, bringing that balance point much closer.
Micron's results follow Infineon's admission earlier this week that sales had fallen 30 per cent. Both sets of results have led analysts to predict a massive downturn in the world DRAM market - deeper even than the general slump in semiconductor sales as a whole. ®