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Print 37 comment(s) - last by Regs.. on Oct 13 at 8:47 AM

Most job losses will be in the U.S. Boise facility

Things are tough all over in the technology industry, and they are even tougher if you are a NAND flash maker. Not only do NAND makers have to deal with the overall bad economy, but the price of NAND is also below that of what it costs to make the modules according to Micron.

CNET News reports that Micron announced it will cut its workforce by 15% and reduce its flash output down at the same time. This announcement comes on the heels of the 20% pay reduction that Micron executives were forced to take last week.

While workforce reductions will take place in Micron fabs around the world, reports say that the bulk of the cuts will be felt here in the U.S., specifically at Micron's Boise fab. Micron said in a statement, "The combination of declining customer demand and product oversupply in the marketplace has driven selling prices for NAND flash memory significantly below manufacturing costs."

The Intel and Micron joint venture -- IM Flash Technologies -- will stop producing NAND flash at the Micron fab in Boise. This closure will reduce the production of NAND by about 35,000 wafers per month. Other Micron and Intel fabs, including one in Utah, will continue operations.

The reductions and fab closures are a direct result of Micron posting continued losses for the last seven quarters. Micron reported a massive $1.6 billion loss in fiscal 2008. The restructuring charges and related expenses are expected to cost Micron in the area of $60 million. However, Micron reports that its cash operating margin is expected to exceed $175 million next year.

The NAND Micron produces is used in products like digital cameras, DAPs and Micron's own line of SSDs.





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bad economy and who is to blame??
By on 10/10/08, Rating: 0
RE: bad economy and who is to blame??
By Spivonious on 10/10/2008 11:19:10 AM , Rating: 2
Totally. Aside from my 401(k) being down 20% for the year, the "economic crisis" is not affecting me at all. Gas prices are lower, food prices are the same, my other bills all are rising as they have been for the past 5 years.


RE: bad economy and who is to blame??
By The0ne on 10/10/2008 11:38:56 AM , Rating: 4
I totally don't see how it is NOT affecting you since you pointed out rise and falls in your examples. 20% of your 401k is alot. Most of those changes might be small and thus one might not see the changes but it's still there. But for those are are on the low end, adding couple cents to milk, gas, electricity and such adds up and it becomes painful.


By Spivonious on 10/10/2008 11:45:53 AM , Rating: 3
20% is a lot, but I'm not retiring for 35-40 years. I have no doubt that the market will have recovered by then.

Gas around me is down to $3.09 for regular. This is better than the $3.99 that it had gotten up to a few months ago.

Food prices have risen, but an extra $10 a week is not going to bust my budget.

I think a lot of people are living beyond their means, and then when milk goes up by a couple cents they can't afford it.

The one good thing that will come out of this "crisis" is that people won't rely so much on credit. People will actually think about whether or not they can afford something before just going ahead with the 12-months same-as-cash deal.


RE: bad economy and who is to blame??
By masher2 on 10/10/2008 11:59:57 AM , Rating: 1
> " on the low end, adding couple cents to milk, gas, electricity and such adds up and it becomes painful."

Err, you have things in reverse. This economic crisis will, if anything, depress prices, not raise them. Food prices rose due to higher energy prices, along with such factors as ethanol fuel production mandates.


By Oregonian2 on 10/10/2008 2:27:40 PM , Rating: 2
Yes, crude prices have been dropping quite a bit and even gas station gas prices have been going down steadily -- even faster of late.


By BansheeX on 10/11/2008 1:10:16 AM , Rating: 3
Our current economy was built on 15 years of unprecedented credit expansion financed by foreign credit. We are running a 70 billion dollar a month trade deficit on that credit, not to increase productive capacity for the world, but to consume products they make so while they accumulate and reinvest our paper to repeat the process. This is idiotic, if I were China, I would dump all 2 trillion dollar reserves and delink the currency to become a producing economy that consumes its own products. We have no savings and few exports to offer the rest of the world, all we do is abuse a reserve currency status gained under gold to export our inflation around the world.

The deflationary argument is goofy. Sure, in measures of world paper which are all inflating synchronously at the moment to soak up our losses, the dollar is falling less quickly. But measured in a yardstick that doesn't change as a result of arbitrary government manufacture, things keep getting more expensive. Despite recent pullbacks, most commodities still take 3x more dollars to buy than they did ten years ago. Inflation has also increased the price of homes, health care, college tuition, you name it. It shows up everywhere.

Now that the banks are in danger, ironically from the very policies of the central bank that fixes their interest rates, the government just declared that home prices should not decline. Speculators walked away from $400k mortgage worth $200k with a credit hit. Now the banks who lent have that collateral. Our socialist government doesn't want this particular industry going bankrupt because it will dry up our phony economy's cocaine valve and painfully reallocate thousands of jobs to manufacturing. Every politician would lose their job if it were to happen during election year. So they started flailing like a wild animal with different types of inflationary bandaids. Then they up and seized the crap so the treasury can issue bonds against them for foreigners to buy at interest rates below real inflation... except they don't want to overpay for homes either. So the Fed will be left to buy most of them with new dollars it created at no labor or material cost, monetizing the debt at the expense of wage earners and savers of dollars.


RE: bad economy and who is to blame??
By Regs on 10/13/2008 8:47:00 AM , Rating: 2
My company has a hiring freeze. When people leave, the ones who are still there get twice the work. It's mostly because the FDA are bunch of pricks because poor people have the right to sue for 8 hour long hard-ons.

The only major crisis I see is a bunch of people who got on the real estate bandwagoon too late and are now losing a lot of money and making banks actually ask questions before giving out a loan. It's also unfortunate those people also employed thousands. So growth stops, and the train tracks have to be rebuilt but for some reason everybody is making this out to be dooms day. I think it's jsut reality.


By Desslok on 10/10/2008 11:25:49 AM , Rating: 3
This is how the NAND market has always been.


By napalmjack on 10/10/2008 11:34:09 AM , Rating: 2
Hello, troll.


RE: bad economy and who is to blame??
By on 10/10/2008 12:26:22 PM , Rating: 2
quote:
The liberal media is making a much bigger deal out of this "recession" than they need to be making. The fundamentals of the economy are strong my friends.

We are not your friends troll. And the fundamentals are not strong at all, which is why the DOW is ebbing towards 8000. The TED spread is nearly 4% rather than the usual 1/4%. proving that the credit market is completely zonked. If this isn't a crisis I don't know what is. The days of living on debt are over. We are going to have to consume less on the whole and balance a few things the trade deficit and the budget deficit.

You can't forever keep borrowing as a country to buy goods and services.


RE: bad economy and who is to blame??
By BarkyMcWoof on 10/10/2008 12:33:07 PM , Rating: 2
The answer is easily found in the October 8, 2008, New York Times business section. Look for "Fanny mae Eases Credit to Aid Mortgage Lending".


RE: bad economy and who is to blame??
By on 10/10/2008 12:52:57 PM , Rating: 1
Not saying that Fanny/Freddie etc are not culpable, but the bigger problem is the derivatives market. In specific mortgage backed securites, credit default swaps, and collaterized debt obligations.


RE: bad economy and who is to blame??
By masher2 on 10/10/2008 1:01:42 PM , Rating: 3
The entire problem stems from one source: government interference in the market. The Fed artificially kept interest rates too low for too long, and GSEs such as Fannie Mae/Freddie Mac and the Federal Home Loan banking system bowed to political pressure to make loans available to people who can only afford them as long as the market kept expanding.

The result was the real estate and building markets overheated until they exploded, causing fatal collateral damage to many other industries as well.

And the government is *still* in the mix, making things worse. Even now as the crisis worsens, look what idiocy Fannie Mae is engaging in. Instead of tightening the rules and making home loans more difficult to come by, they're dropping the costs for mortgage insurance on new loans -- just the opposite of what the market needs:

http://www.reuters.com/article/rbssFinancialServic...


RE: bad economy and who is to blame??
By on 10/10/2008 1:48:24 PM , Rating: 1
quote:
The result was the real estate and building markets overheated until they exploded, causing fatal collateral damage to many other industries as well.


Was this in the economic crisis for dummies book? Asset inflation is indeed the trigger of this crisis but Warren Buffet himself caused the credit derivatives market "financial weapons on mass destruction". I am afraid you don't understand what you're talking about.


By Oregonian2 on 10/10/2008 2:32:01 PM , Rating: 2
I read someone's forum'ish posting about "credit default swaps" which called that the prime reason for the collapse with numbers that were hard to believe (going into considerable detail explaining what that was). Hopefully he was full of it, because if he's not the world's in deep d**d**.


RE: bad economy and who is to blame??
By masher2 on 10/10/2008 2:41:24 PM , Rating: 3
I'm afraid you don't understand the derivatives market, nor its relationship to interest rates and the real estate and stock markets. The vast majority (80% as mid-2008) of derivates today aren't based on hard assets, but are simply psuedo-investments with a value based on how interest rates move. Half of the rest (10%) are credit derivatives, the value of which depends on how (un)likely an institution is to default on a bond, loan, or credit swap.

Derivates thus act as an amplifier to underlying market conditions, translating small changes in markets into very large ones. As Buffet himself says, derivatives allow a holder to overstate actual profits, and to concentrate market risks in the hands of a few, massively large banks and other firms -- just the firms which were hit by the real estate meltdown.

Here's the Treasury Dept's latest report on bank trading in derivatives, which confirms the above figures.

http://www.occ.treas.gov/ftp/release/2008-115a.pdf


RE: bad economy and who is to blame??
By on 10/10/2008 6:15:43 PM , Rating: 2
quote:
The vast majority (80% as mid-2008) of derivates today aren't based on hard assets, but are simply psuedo-investments with a value based on how interest rates move.

You are contradicting yourself. First you blame the real estate market. And then you provide proof that the credit derivatives market is much bigger than mortgage related securities.

It is certain that the asset inflation bubble bursting caused this to start. But it would've been a minor blip if not for the gambling that passes as investing in the derivatives market. Anyway, facts don't matter to people like you so -shrug-


By masher2 on 10/11/2008 10:36:42 AM , Rating: 2
> "You are contradicting yourself. "

Only to someone who doesn't plain English. The derivatives market doesn't move independently; it rises or falls based on underlying markets. It's an amplifier of market conditions, nothing more.

> "then you provide proof that the credit derivatives market is much bigger than mortgage related securities."

You've gotten confused over notional value, as compared to mark-to-market value. The US mortgage market alone is over $11 trillion dollars. For the entire world , the market value of credit derivates before the crash was only 12.7 trillion. The size of the US market is substantially smaller.

http://www.isda.org/press/press092508.html

But even those figures are misleading. The mortgage market is only a small slice of the total real estate, building, and ancillary markets. The subprime meltdown not only caused a collapse in the securities markets, it also took the bottom out of real estate, the largest market in the country.

While it's certainly correct derivates dramatically accentuated this cris, blaming them for it is sophomoric. They're an effect, not a cause. It's rather like blaming WW2 on D-Day, rather than the invasion of Poland.


By Seemonkeyscanfly on 10/10/2008 4:02:38 PM , Rating: 3
Federal Home Loan banking system bowed to political pressure to make loans available to people who can only afford them as long as the market kept expanding.

Sad thing is most will blame the current office for this issue. When actually this was start by Clinton. It was a good idea or thought, that is let some of the people who almost can afford to buy a house buy their house. However, the banks were just allowed to open up their risk allowance way to much. Now, after 12 plus years of to many risky loans, we have are current mess. Which you are right the housing market effects the stability of all other markets, as we are all seeing today.
It should also be pointed out that about 1/3 of the bad loans (in default) are from illegal immigrants. To which I'm still trying to understand how or why anyone would give them a loan. They are criminals for being in this country without proper paper work, being a criminal usually lowers your credit score and makes you ineligible for any loan. But that would be the government people over years and years and years of pushing bad policy down the banks throats ...
To clarify never have I been against immigrants, just every much against illegal immigrants.


RE: bad economy and who is to blame??
By winterspan on 10/10/08, Rating: 0
RE: bad economy and who is to blame??
By sgw2n5 on 10/10/2008 6:07:33 PM , Rating: 2
Obvious troll is obvious.


RE: bad economy and who is to blame??
By croc on 10/10/2008 5:35:45 PM , Rating: 2
And this relates to the topic how???


By Bonesdad on 10/12/2008 4:05:35 PM , Rating: 1
man, i'd like to vote a wank like you down to -10...


Makes you wonder
By japlha on 10/10/2008 12:06:28 PM , Rating: 2
I wonder if the 15% workforce cut amounts to more or less the executives 20% pay reduction?




RE: Makes you wonder
By nafhan on 10/10/2008 12:24:06 PM , Rating: 3
Don't know, but a 20% pay reduction probably saves more money than taking a tropical vacation...

AIG should have cut their executives pay.


RE: Makes you wonder
By masher2 on 10/10/2008 12:38:00 PM , Rating: 5
Actually, AIG shouldn't have been bailed out at all. The strength of the capitalist system is that companies that continually make poor choices go bankrupt, and are thus weeded out of the system.


RE: Makes you wonder
By sgw2n5 on 10/10/2008 1:32:23 PM , Rating: 5
The USA hasn't been a capitalist country for quite some time.

When government officials realized that they can buy our votes with our own money, democracy is on the downswing.


RE: Makes you wonder
By Ordr on 10/10/2008 4:46:03 PM , Rating: 3
I believe 1890 is when it began to go downhill.


RE: Makes you wonder
By Spivonious on 10/10/2008 1:32:35 PM , Rating: 5
Mike, I wish there were more people like us. If there were, neither McCain nor Obama would be candidates right now.


RE: Makes you wonder
By icrf on 10/10/2008 10:37:16 PM , Rating: 2
Bob Barr?


RE: Makes you wonder
By FITCamaro on 10/11/2008 7:33:02 PM , Rating: 2
Jim DeMint would be nice.


RE: Makes you wonder
By Regs on 10/12/2008 3:14:18 PM , Rating: 2
Don't look for me, I was going to vote for General Wesley in 04. But I guess God had better plans.


RE: Makes you wonder
By Seemonkeyscanfly on 10/10/2008 4:12:46 PM , Rating: 2
Way less, they could hire 15% more workforce and it would still be a bigger saving if they did an upper executive 20% pay cut.
Example: WaMu CEO received 17 million dollar bonus three weeks before they closed. No, not for year end or quarter end, no not for profits, no just because he desired a bonus.... why I do not know. So if you pay an average of $50,000 per year with another $50,000 to cover pay roll taxes and benefit to your employees (100k total each) that bonus could have employed 170 people. Now let talk about the rest of his salary......


RE: Makes you wonder
By ThisSpaceForRent on 10/10/2008 6:45:57 PM , Rating: 3
He received that money for being on the job 3 weeks. WaMu was in trouble before he took over too. WaMu was contractual obligated to pay him that amount if he lost his job. He just happened to be in the right place at the right time. Once again though, executive compensation is grossly over-inflated.


RE: Makes you wonder
By rudy on 10/11/2008 9:29:18 PM , Rating: 2
It's called the golden parachute a payment CEOs negotiate. I do not think it is right but it is normal.


RE: Makes you wonder
By Bonesdad on 10/12/2008 4:04:32 PM , Rating: 2
Appleton makes about 9 mil in base salary etc. At one time in the past, however, he declined his base pay, and accepted $1 in base pay for the year. Time to step up again Mr. Appleton.


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