Bleak conditions in the semiconductor market took a heavy toll on Micron Technology Inc.'s fiscal 2001 earnings, but company officials said they remain committed to capital expansions next year, in preparation for the market's eventual recovery.
Micron today reported a net loss of $576 million, or 96 cents per diluted share, for its fiscal fourth quarter, which ended Aug. 30. Micron's net sales for the quarter were $480 million.
For the full fiscal year, Micron posted a net loss from continuing operations of $521 million, or $0.88 per diluted share, on $3.9 billion of net sales. A year ago, the company had net income from continuing operations of $1.5 billion, or $2.63 per diluted share, on net sales of $6.3 billion.
Micron's net loss included a $191 million charge for the write-down of its equity investment in Interland Inc. (formerly Micron Electronics Inc.), as well as the effect of a $466 million write-down of work in process and finished-goods inventories.
"The global economy is facing stiff challenges from which our industry is certainly not exempt," said Steve Appleton, chief executive of Micron, Boise, Idaho, in a prepared statement.
The DRAM market at the end of Micron's fiscal quarter was dour on many fronts, Micron officials said in a conference call to analysts. DRAM inventory levels in the industry at the end of August had jumped to between 10 and 14 weeks, according to Mike Sadler, vice president of sales. Inventory continued to increase beyond those levels in the first two weeks of September, he added.
"We're at the low end of that range, or slightly below," he said.
The blended spot market price of 128-megabit SDRAMs continued to hover below $2, and in some cases in the $1.50 range. Micron's portion of sales in the spot market about doubled in the quarter to 40% of megabits shipped, up from 20% to 25% in the previous quarter, Sadler said.
The.hoped-for back-to-school boost in the PC market in the last quarter never materialized, Sadler added. Micron sales to PC OEMs remained linear week-to-week over the entire period, the sales official confirmed. However, he said customers were telling Micron they expected normal holiday season sales pickup to come in the calendar fourth quarter, although "we're just taking it a day at a time."
One bright spot is a rapidly accelerating memory content per PC -- now at 140Mbytes to 180Mbytes per box, Sadler claimed. Micron last quarter shipped three-fourths of its memory modules in 128Mbyte size and one-fourth as 256-Mbyte size.
Micron's own Crucial Technology memory module subsidiary for the retail and aftermarket now accounts for 10% of total megabits shipped, he said. Sadler said Micron expects to have about a 30% increase in DRAM unit production bit growth rate in its current fiscal year, which began Sept. 1. He said the first fiscal quarter DRAM bit growth would be in the single-digit percentage range.
Appleton said Micron is still projecting a $1 billion investment budget for the current fiscal year, although it could be adjusted depending on market conditions. Kip Bedard, Micron vice president of inventor relations, said 40% is planned for front end fabs, 15% for back-end chip test and assembly, 15% for R&D, and the remainder for plan operations and other projects.
Appleton said Micron has started production in its Boise fabs at the 0.13-micron processing node. By the end of November, a spokesman said, 98% of Boise production will be at 0.15-micron or below, and 67% worldwide will be at 0.15.