Chipmaker Micron Technology Inc posted a wider-than-expected quarterly loss as selling prices for its memory products continued to fall, sending its shares 2 percent lower on Thursday after an 11 percent rise during the regular session.
Micron, like other memory manufacturers, has been stung by global oversupply and a bad economy, which has triggered a two-year decline in prices. As market prices for dynamic random access memory (DRAM), and flash memory have tanked, companies have struggled to cut costs.
The company’s net loss in its fiscal second quarter ending on March 5 narrowed to US$751 million, or US$0.97 a share, from US$777 million, or US$1.01 a share, from the quarter a year ago.
Excluding US$120 million in restructuring and other items, Micron lost US$0.82 a share. Wall Street analysts, on average, had been expecting a loss of US$0.62 a share, Reuters Estimates showed.
Second-quarter revenue slid 27 percent to US$993 million, missing Wall Street’s target of US$1.15 billion.
Revenue from sales of DRAM products fell 30 percent from the first quarter, as average selling prices dropped 30 percent. Flash memory revenue fell 20 percent as prices dropped 13 percent.
However, prices for DRAM and flash memory seem to be recovering, Micron executives said in a conference call.
Micron shares dipped on Wednesday after government-funded chipmaker Taiwan Memory Co (TMC, 台灣記憶體公司) announced a partnership with Micron rival Elpida Memory Inc. Micron itself is still exploring a potential partnership with TMC.
“We’re still in discussions with the Taiwan government,” said Micron CEO Steve Appleton, but the deal with Elpida was “not okay with us” and there was “no compelling reason yet in terms of benefits for Micron to participate.”
Micron owns a large portion of Inotera Memories Inc (華亞科技), one of the two main chip manufacturers in Taiwan, Appleton said.
“There’s nothing really that’s that negative for Micron in the event that we aren’t able to come to a formula that works for both us,” he said.
Micron announced plans to cut 2,000 jobs, or 12 percent of its workforce, in February on top of a 15 percent cut in October. The cuts should be completed by the end of August, the company said.
Overall headcount is down 5 percent from the previous quarter to 20,794 employees.
In an additional cost-cutting measure the company said in February it would stop producing 200mm wafers in favor of 300mm wafers. The larger wafers are more cost effective and should save the company US$150 million a year.