Both 16-megabit and 64-Mb Dynamic RAM (DRAM) prices have bounced up in July, said Kipp Bedard, vice president of corporate affairs at Micron Technology, speaking at the BancAmerica Robertson Stephens semiconductor conference in San Francisco on Thursday.
The average selling price (ASP) of a 16-Mb DRAM jumped to $1.65 from $1.35, while 64-Mb, PC-100-compliant devices are hovering around the $9.00 mark after they bottomed out at $7.50 this spring.
The company is now receiving a premium of between $1.25 and $1.50 on PC-100-compliant 64-Mb devices, compared with non-PC-100-compliant parts, Bedard said. Nearly 75 percent of Micron's 64-Mb devices shipped are PC-100-complaint.
"I can't give a reason for the ASP increases," he said, citing the possibility of a pick up in demand from PC original equipment manufacturers that have completed reducing finished goods inventory in the reseller channel, as well as seasonal factors. "It could be temporary."
Temporary or not, it was enough to boost investors' faith in the company. Shares of Micron MU gained 2 1/8 to 33 5/16.
Micron achieved the 16/64-Mb price-per-bit crossover in mid July, one quarter earlier than it had expected, he said. The company said it will reach unit crossover in late September or early October.
The need for storage is driving the average amount of memory per PC by 8 percent per month. In April, 42 megabytes of DRAM was the average; by November, Micron said the average could reach 83 MBs per PC, higher than its original forecast of 55 MBs six months ago.
Nearly 50 percent of Micron's wafer starts are at 0.21-micron, the process technology it will use to outfit the Richardson, Texas fab it acquired from Texas Instruments last month. It will take between nine and 12 months to convert the fab. "We'll have our hands full," Bedard said.
In fiscal 1999, the company will make $900 million in capital expenditures; $600 million will be allocated toward its Boise, Idaho, fab, while the rest will be spent on its Avezzano, Italy, facility -- also recently acquired from Texas Instruments, he said.
In its aggressive pursuit to shrink die to reduce costs and grow capacity, the company has spent the last four weeks negotiating new financing agreements with banks in Japan and Singapore, where it is a minority owner in DRAM ventures.
It plans to stick with 16-Mb DRAMs for a while, and will do one more die shrink on the generation from 0.3-micron to 0.21-micron.
Micron also expects to sample a Rambus DRAM part before the end of the year. "We're starting to run wafers," Bedard said.