BOISE, Idaho--Hit hard by weakness in DRAM markets, Micron Technology Inc. today posted a net loss of $576 million on shrinking sales of just $480.3 million for the company's fiscal fourth quarter, ended Aug. 30.
Micron's revenues plunged 40% sequentially from $802.3 million in the prior fiscal quarter, and its sales were 79% lower than a year ago.
"The global economy is facing stiff challenges from which our industry is certainly not exempt," said Steve Appleton, chief executive of Micron. However, Appleton remained defiant in the face of mounting losses and falling DRAM prices. He said Micron would fight back and make investments of $1 billion in in leading-edge technologies during the company's new fiscal year.
The CEO said Micron is "poised with one of the strongest balance sheets in the industry, an excellent complement of people resources, an industry leading process technology and a resolve to emerge from these troubled times as the strongest semiconductor memory manufacturer in the world."
"Our manufacturing implementation of 0.13-micron process technology should position us very positively for 2002," Appleton added.
Micron said it has budgeted $1 billion for capital spending in fiscal 2002, which began in September. In the fiscal 2001 year, Micron previously said it had budgeted $1.8 billion for capital spending. The new investments will be aimed at advancing Micron's position "as the lowest cost producer," according to the Boise DRAM maker.
The company also said it finished the fiscal 2001 year with cash and liquid investments exceeding a value of $1.6 billion.
For the fiscal 2001 year, ended Aug. 30, Micron had a net loss from continuing operations of $521 million, or $0.88 per diluted share, on net sales of $3.9 billion compared to a net income of $1.5 billion on revenues of $6.4 billion in fiscal 2000.
Average selling prices for Micron's memory products in the just-ended fiscal fourth quarter declined 55% compared to the prior third quarter period. The average selling prices were 85% lower than the fourth fiscal quarter last year, said the Boise company.
Micron said its total memory shipments, measured in megabits, increased sequentially by 30% in the fiscal fourth quarter from the prior three-month period. Total megabit shipments were up 45% from the fiscal fourth quarter last year, the company said.
The DRAM market at the end of Micron's fiscal quarter was dour onmany fronts, Micron officials said in a conference call with analysts after the company released its results this afternoon. 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 140 Mbytes to 180 Mbytes per box, Sadler claimed. Micron last quarter shipped three-fourths of its memory modules in 128-Mbyte 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.
Chief executive 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 the 0.15-micron node.
--Additional reporting on Micron's conference call provided by Jack Robertson of EBN, a sister publication of Semiconductor Business News.