LEHI — The cynics might say Micron is the debutante computer company that issued invitations to a big bash — but never did hold the fancy ball.
But company officials say it shouldn't be a surprise that the Boise-based technology giant hasn't yet operated its Lehi facility to the extent promised in 1995.
"Our business is cyclical in nature and will continue to be," said Kipp Bedard, a Micron spokesman. "With that in mind, Lehi continues to be on our road map for future expansion."
Bedard said the computer industry was surprised and dismayed when sales took a dive and orders for computer memory wafers slowed shortly after Micron started work on its proposed $1.3 billion building on a Utah County hillside.
Instead of employing between 3,000 and 4,000 workers, Micron has consistently run the Lehi testing plant with only a few hundred. Instead of holding a splashy dedication ceremony a year after breaking ground, the company has quietly inched along constructing the 900,000-square-foot set of buildings without fanfare.
"As with other industries, semiconductor manufacturers rely on a healthy economic environment for the products that consume the products they make," Bedard said. "In our case, the demand for products like personal computers, laptops, servers, network systems, workstations, set-top boxes, digital cameras, game boxes, PDAs and cell phones drive the demand for our products."
As the economy improves and corporations and consumers renew their buying patterns, Bedard said, the "demand for our products will improve."
Until then, Micron is attempting to hold steady in a shaky economy, trying a variety of cost-cutting measures. In June 2001, the company shaved salaries of top executives by 20 percent. A few months later, all employees saw a 10 percent cut. CEO Steve Appleton said he would work for no salary at all.
The company announced a 10 percent lay-off in February and has reported net losses of $2.5 billion over the past two years.
Company executives are working with Sens. Orrin Hatch and Bob Bennett, R-Utah, hoping to curtail taxpayer subsidies that have been going to shore up Korean competitors.
"One competitor alone has received approximately $16 billion in subsidies over the past three years," Bedard said.
If that can be accomplished, and if a possible war with Iraq doesn't dampen sales, Bedard said he anticipates Micron will ramp up to begin producing a larger 300 millimeter wafer that can provide more memory than the 200 millimeter wafers.
"The Lehi site was built with 300 millimeter wafer fabrication in mind," Bedard said.
In 1994, when Micron Technology announced its plan to build a billion-dollar facility away from its Boise headquarters, leaders from half a dozen Midwestern and Western states scrambled to get the business' attention.
Lehi won the race, beating out the neighboring city of Payson and the states of Idaho, Montana, Oklahoma, Iowa and Indiana.
Lehi officials entered into a controversial redevelopment tax package agreement that traded money between the corporation and the city to pay for infrastructure improvements that Lehi would repay over 12 years using a percentage of the company's annual tax assessment.
Gov. Mike Leavitt lauded Micron's decision to locate on 200 acres on the south side of the Traverse Ridge overlooking the Utah Valley. He and others celebrated the high-paying jobs Micron promised to create, hailing the announcement as a "red-letter" day in Utah history.
"Not only is this a new business for Utah, but a new industry as well. It means thousands of paychecks and people being able to buy new automobiles and homes," he said.
Today, Leavitt says it's still a boon for Utah to have Micron and it's remarkable facility.
The governor believes Utah's role is to stand ready with an educated, capable work force that Micron will need once the market swings upward. "On those fronts, we've made a lot of progress," Leavitt said.
David Politis, a market analyst, said he believes the future for Micron is uncertain at best. "Will they go out of business tomorrow? No," Politis said. "But their's is not an easy road."
Politis said the possibility of going to war leaves consumers in an uneasy place, unwilling and slow to buy new computers and upgrades to existing technology.
"Since making memory chips is historically a commodity business which tends to suffer the most in times of economic stress, Micron has been struggling," Politis said. "But it's not just Micron struggling."
Many computer and computer-component manufacturing businesses have had a rough go for the past 18 to 36 months.
Politis thinks the Lehi plant would be fully operational if Micron Technology had not bought the Texas Instruments plant.
"There are two reasons the Lehi facility has never blossomed. It's not strategic, and the economy hasn't cycled up. It's nice. It's there, but the only thing they've been doing is quality assurance work. They're not producing product there."
When the economy does improve, Politis believes Micron will move to making larger dies that can squeeze more memory onto each wafer.
"That will probably be mid-2004 or so," Politis said.
Bedard said it could be sooner.
"Should Utahns and the local communities remain optimistic about Micron's future viability? Yes," Bedard said. "We are a very low-cost manufacturer of the products we make. We have excellent financial reserves with low debt, and we have new products that continue to exceed market and customer expectations."