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Chipmaker Micron reports $52 million loss in quarter

SHARE Chipmaker Micron reports $52 million loss in quarter

Micron Technology Inc., the largest U.S. maker of computer memory chips, reported a second-quarter loss of $52 million after its expansion into flash memory increased costs and an inventory glut sent prices plummeting.

The loss was 7 cents a share, compared with a profit of $193 million, or 27 cents, a year earlier, Boise-based Micron said Wednesday in a statement. Sales rose 16 percent to $1.43 billion in the period ended March 3.

Prices for personal-computer memory chips, the company's biggest revenue source, have sunk close to the cost of production. Efforts by Chief Executive Officer Steve Appleton to diversify also face challenges. Prices are sliding in Micron's flash-memory business, and Motorola Inc. has cut orders for its mobile-phone camera sensors.

Micron's shares rose 49 cents, or 4.1 percent, to $12.56 in extended trading. They had dropped 16 cents to $12.07 at 4 p.m. in New York Stock Exchange composite trading. The shares have fallen 13.5 percent this year.

The second-quarter loss compared with an average estimated profit of 3 cents a share among 15 analysts in a Bloomberg survey. Analysts had expected sales of $1.47 billion, the average of 18 estimates.

Micron is facing "challenging market conditions" Appleton said in the statement. Decreases in the company's costs of flash-memory production were "eclipsed" by the 30 percent decline in the average selling price, he said.

Micron started a joint venture last year with Intel Corp. to produce flash memory chips for portable electronics, such as digital cameras and Apple Inc.'s iPod. The companies sought to challenge Samsung Electronics Co. and Toshiba Corp. for a share of a booming market.

The IM Flash Technologies joint venture has a main facility in Lehi that will use 60 percent of the 2.3 million square feet available at the former Micron plant there. The company has said it expects to have a full work force of about 2,000.

"We are pleased with the ramp of our NAND flash production at our Virginia and Utah facilities," Micron Chief Operating Officer Mark Durcan said in a prepared statement. "Both operations are executing well and proving the production worthiness of our advanced NAND technology."

Contributing: Deborah Kostroun