Micron Technology Inc.'s net loss widened in its latest quarter and sales dropped 5% as declining prices combined with special charges to push the memory manufacturer deeper into the red.
Micron, the world's No. 2 global DRAM manufacturer, said it lost $215 million, or 36 cents per share, in the three months ended May 29, compared with $24.2 million, or 4 cents a share, in the fiscal 2002 third quarter.
The Boise, Idaho, company's revenue also slipped to $732.7 million, slightly above analysts' consensus estimate of $730, but below the $771.2 million recorded in the year ago quarter.
Micron said in a statement that it shipped more DRAM products in the quarter but that the volume shipment did not translate into higher revenue because average selling prices declined 15%.
The company also recorded charges to work-in-process and finished goods inventories, which helped drive its gross margin down to 10% from 22% in the year-ago quarter.
"Megabit production increased approximately 20% in the third quarter compared to the second quarter principally due to the company's process technology migration to 0.13- and 0.11-micron devices and improved manufacturing yields," Micron said in the statement. "Significantly improved manufacturing costs in the third quarter mitigated the effects of declines in average selling prices."
Micron spent $160 million on capital investments in its fiscal third quarter and is on track for its estimated fiscal year capex of $1 billion, said Bill Stover, vice president of finance, in a conference call with financial analysts.
Chairman Steve Appleton said about 16% of the company's capex is earmarked for a 300mm-wafer pilot line in Manassas, Va. Appleton told analysts that the fab is ramping up to a level of 500 wafers a week. At that point the company will decide whether to expand production rates, he said.
Micron executives told analysts that the company is on schedule with its die shrink transition and expects to have half of its production at 0.11-micron linewidths by the end of the calendar year.
Mike Sadler, vice president of worldwide sales, said Micron now has only two weeks of inventory and sometimes less, which he characterized as dangerously low to adequately serve customers.
"Anything less than two weeks inventory means some stock outages can occur for some customers," he said.