BOISE, Idaho -- Micron Technology Inc. today reported a 30% sequential drop in net sales to $1.8 billion in the company's fiscal first quarter, ended Nov. 30, compared to $2.6 billion in the prior three-month period. Micron said the lower revenues resulted from a drop in memory shipments and a 10% decline in average selling prices for chips.
Micron estimated that memory shipments fell 25%, measured in "megabits," compared to volumes recorded in the company's fiscal fourth quarter, which ended Aug. 31.
Demand for DRAMs has eroded in recent months because of weaker than expected PC shipments. Many suppliers have blamed inventory adjustments in distribution channels for the drop in bit shipments.
Micron chairman and CEO Steve Appleton said market conditions continue to weaken, but he characterized his company's performance in the just-ended fiscal quarter as being "very strong." Micron recorded a net income of $352 million, or $0.58 per share, in the first fiscal quarter compared to $727 million, or $1.20 per share, in the prior fiscal fourth quarter.
Compared to a year ago, Micron's net sales were up 12.5% from $1.6 billion in the first fiscal quarter of 2000. The Boise-based memory maker had a net income of $341 million, or $0.60 per share, in the fiscal quarter last year.
"Since quarter end, market conditions for our primary products have continued to weaken resulting in significant declines in average selling prices and higher inventory levels," Appleton said. However, the Micron president said he believes Micron is "well positioned with leading-edge process technology, low-cost manufacturing expertise, and strong financials."
Micron said the gross margin for its semiconductor operations was 49% in the fiscal first quarter compared to 58% in the prior three-month period. The decrease in gross margin was primarily due to lower average selling prices for DRAMs and higher costs for semiconductor memory products purchased under joint venture supply arrangements, said the company.