The days of monstrous profits may be over for Boise-based Micron Technology, and that could help soften Idaho's economy.
Stockholders already are feeling the heat. The computer chip manufacturer's stock has plunged almost 42 percent in the past two months, from a record high of $94.375 on Sept. 11 to $55.125 on Friday."The industry doesn't have the investment potential that it did a couple of years ago," said analyst Richard Whittington of Sound-View Financial Group in Stamford, Conn. "Until that excitement returns, I'll be on the sidelines."
Micron has been on an extraordinary run for three years. Its profits have ballooned as industry sales of dynamic random access memory chips grew 69 percent in 1993, 57 percent in 1994 and are estimated to rise 60 percent in 1995.
But that rate of growth is expected to slow dramatically next year, to about 45 percent. It could fall to 23 percent in 1997, and average about 15 percent a year for the rest of the decade, industry watchers say.
While those rates are nothing to sneeze at, some securities analysts who have been wild about Micron and other semiconductor stocks the past two years have become disenchanted.
The stock falloff is the sharpest price drop Micron has endured in at least eight years.
The economic implications range from the stability of 8,000 Micron jobs in Ada and Canyon counties to tax revenues. Micron paid 22 percent of the state's corporate taxes in 1994.
To be sure, Micron isn't the only local high-tech company whose stock is under pressure. Hewlett-Packard Co.'s shares have pla-teaued, even though profits soared 42 percent in HP's latest quarter. Zilog's shares have plunged 43 percent since July.
But Micron is the only one of the three with headquarters in Boise. As such, how it reacts to the slowdown is particularly significant.
Micron Chairman Steve Appleton said the stock price drop will have no bearing on the company's aggressive expansion plans at the Micron sites in Boise and Lehi.
"I try to focus on those things we can control and not those things we can't control," Appleton said. "I would not pretend in the least to be able to predict Wall Street."
He said expansion plans are based on available cash and market conditions.