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Micron loses 91 cents per diluted share, twice analysts prediction

NAND and DRAM makers are among the hardest hit in the technology sector with the slowing global economy. These manufacturers were already hurting due to an oversupply that had driven prices down across the market at times leading to sales price being more than the cost of production.

The largest DRAM and NAND maker in the U.S., Micron, announced this week that it had posted its eighth consecutive quarterly loss. The memory company posted a net loss of $706 million amounting to 91 cents per diluted share.

Analysts expected a loss, but according to a poll by Bloomberg, the average loss was expected to be in the area of 45 cents per share. Micron posted roughly twice the loss expected by many analysts. Micron pointed out that the loss included a $369 million write-down of memory chip products.

The company reports that sales of its memory products fell 4% from the previous quarter due to significant decreased in market selling prices. Average selling prices for Micron DRAM fell 34% while average prices for its NAND product fell 24%.

Micron CEO Steve Appleton talked about the global oversupply of NAND and DRAM in a conference call according to CNET News saying, "Most of the (memory chip) companies have announced (production cuts) in the neighborhood of 20 percent, 30 percent." Appleton says that how fast the production comes back online will depend on demand in the first half of 2009.

As hard hit as the NAND and DRAM manufacturers are, the builders of equipment that is used to produce NAND and DRAM may be worse off in 2009 than the actual makers of the product. CNET News reports that some of these equipment makers expect to see no business at all in certain sectors in 2009.

It is probably safe to assume that Micron will be forced to make further cutbacks moving into 2009. The company cut 15% of its workforce in October. Oddly, a few days after Micron cut its workforce; it spent $400 million to buy a stake in a DRAM fab.

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While I am loving RAM prices right now...
By Motoman on 12/24/2008 2:04:08 PM , Rating: 3 can't go on forever. There will be some serious attrition and/or consolidation, and then at some point RAM will rise to profitable pricing again.

In the meantime...keep selling 2Gb of DDR2 RAM at $20 or less and I'll keep buying it!

By Xenoterranos on 12/24/2008 3:47:29 PM , Rating: 2
This will probably happen at first when DDR3 becomes more mainstream. At least, I think they're hoping it will!

By neothe0ne on 12/24/2008 4:44:28 PM , Rating: 2
Don't you mean 4 gb of DDR2 ram?

By Clauzii on 12/25/2008 11:34:18 PM , Rating: 2
But man would I love to have some kind of riser cards like in the old days of 72 pin SIMM's and very costly memory limits.

Well, if it weren't for the comparably low maximum of today's normal OS's and 2-4 (most mb's) memory slots, most people would be able to buy, say, 16 GB and up for their PC/MAC/Linux etc. machines - but can't since Microsoft and hardware is the limit.

Limits of like max. 16GB in normal XP/Vista versions while at the same time memory module sizes goes up, combined with Vista's much bigger memory resource needs have made a memory market almost gasping for air since it is easy to fill the normal 2-4 memory connectors on a motherboard to the max.

My suggestion is that it's absolutely time for Microsoft to wholly remove or at least heighten the memory limits beyond 'any normal amount' AND for the motherboard makers to either include the ole'style 8 RAM sockets again or make riser cards of some kind. Until that happens, machines will 'starve' and the memory industry will likely go towards some kind of 'overproduction'.

By pugster on 12/26/2008 12:36:34 PM , Rating: 2
Yeah, I just brought some 4gbs 2x2gb pc2-6400 memory for $10 after rebate. I thought that Micron is doing 'okay' because they are actually selling memory. Taiwan's memory companies are almost gone at this point and they are looking for a bailout. Looks like Hynix and Samsung are the only companies doing okay at this point.

"People Don't Respect Confidentiality in This Industry" -- Sony Computer Entertainment of America President and CEO Jack Tretton
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