Micron Technology Inc, the largest US computer chipmaker, reported a third consecutive quarterly loss after sluggish demand for PCs dragged down chip prices.
The second-quarter net loss was US$224 million, or US$0.23 a share, compared with a profit of US$72 million, or US$0.07, a year earlier, the Boise, Idaho-based company said yesterday. Sales were US$2.07 billion in the period, which ended March 1.
Analysts had predicted a loss of US$0.19 and revenue of US$2.01 billion on average, according to data compiled by Bloomberg.
A glut of memory chips has sent prices tumbling, making it harder for Micron and its competitors to stay profitable.
The picture may improve if the bankruptcy of Japan’s Elpida Memory Inc reduces industry output, said Alex Gauna, an analyst at JMP Securities LLC in San Francisco.
“The industry is poised to get healthier, but it’s not healthy yet,” Gauna said.
He recommends buying Micron shares, which he does not own himself.
“We’ve seen improvements, but most of the product drivers and better seasonality come in the second half of the year,” he said.
Elpida, the last Japanese computer chipmaker, sought bankruptcy protection last month after losses left it unable to pay debts. The Japanese press has speculated that Micron may be among bidders for some of its assets.
Micron will continue to look at developments in the industry to see if there are investment opportunities “that make sense for shareholders,” president Mark Adams said in a telephone interview.
He declined to comment on whether the company is considering an investment in Elpida.
Micron also makes memory chips used in smartphones and tablet computers in a joint venture with Intel Corp. On Feb. 28, Micron announced plans to buy two of the joint venture’s factories for about US$600 million, gaining greater control over the partnership.
Micron said yesterday that it while it sold 20 percent more chips by volume in the second quarter, compared with the preceding three months, a decline in prices resulted in only “slightly higher” revenue.
Prices of NAND chips that are used in mobile devices have fallen about 20 percent this month, Micron said.
That was due to lower orders from makers of solid state drives — main storage in computers made using memory chips — as they work through inventory, Adams said.
DRAM chip prices have remained unchanged this quarter as manufacturers stock up on concern that Elpida’s bankruptcy will hurt supply.
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