Tags: Micron | memory | chip | loss

Micron Posts Loss on Declining Memory-Chip Prices

Thursday, 27 Sep 2012 05:10 PM

Micron Technology Inc., the largest U.S. maker of memory chips, reported a wider fourth-quarter loss as lackluster demand for personal computers eroded the price of components.

The net loss for the period that ended Aug. 30 was $243 million, or 24 cents a share, compared with a loss of $135 million, or 14 cents, a year earlier, the Boise, Idaho-based company said Thursday in a filing. Revenue fell 8.3 percent to $1.96 billion. Analysts on average projected a loss of 23 cents on sales of $2.11 billion, according to data compiled by Bloomberg.

Shrinking demand for PCs sent the price of dynamic random access memory, or DRAM, down 6 percent in the quarter, according to an estimate from Doug Freedman, an analyst at RBC Capital Markets. Micron also makes so-called Nand flash memory, chips used to store data in smartphones, which also declined in price by an average of 6 percent, he said.

Micron shares rose 1.3 percent to $6.02 at the close in New York. The stock has lost 4.4 percent this year.

In July, Micron agreed to acquire bankrupt Elpida Memory Inc. for 200 billion yen ($2.57 billion). The transaction is aimed at grabbing control of more supply and making it better able to take on industry leader Samsung Electronics Co. as well as South Korea’s SK Hynix Inc. Elpida, the last Japanese maker of computer-memory chips, sought bankruptcy protection in February after losses left it unable to pay debts.

The slowing of expansion plans by the memory-chip industry and elimination of another competitor when Micron completes the takeover of Elpida will improve prices next year as demand and supply are better aligned, Freedman wrote in a research note.

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Micron Technology, the largest U.S. maker of memory chips, reported a wider fourth-quarter loss as lackluster demand for personal computers eroded the price of components.
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2012-10-27
 

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