Micron Has Net Loss of $52 Million in Second Quarter 2007

[Apoptosis]

Micron Technology, Inc., Reports Results for the Second Quarter of Fiscal 2007

BOISE, Idaho, Apr 04, 2007 (BUSINESS WIRE) -- Micron Technology, Inc., today announced financial results for its second quarter and first six months of fiscal 2007, which ended March 1. For the first six months of fiscal 2007, the Company earned net income of $63 million ($0.08 per diluted share) on net sales of $2.96 billion. For the second quarter, the Company incurred a net loss of $52 million ($0.07 per diluted share) on net sales of $1.43 billion.

Megabit sales of memory products increased approximately 35 percent in the second quarter of fiscal 2007 compared to the first quarter. During the second quarter, the Company increased its production of DRAM and NAND flash memory products by 15 percent and 60 percent, respectively, resulting from improved DRAM manufacturing efficiencies and the ramp of NAND production in Virginia. Memory production slightly outpaced memory sales in the second quarter, leading to a higher level of finished goods inventories. As a result of the higher levels of production, the Company's per megabit manufacturing costs for DRAM and NAND flash memory products decreased approximately 15 percent and 25 percent, respectively, in the second quarter compared to the first.

"We are pleased with the ramp of our NAND flash production at our Virginia and Utah facilities," said Micron Chief Operating Officer Mark Durcan. "Both operations are executing well and proving the production worthiness of our advanced NAND technology. Additionally, our TECH Semiconductor joint venture fab in Singapore is progressing ahead of schedule on its 300 mm conversion and ramp of advanced DRAM devices."

Market conditions in the second quarter of fiscal 2007 for the Company's memory products led to significant declines in average selling prices for much of the Company's product portfolio. Decreases in the Company's costs of NAND flash memory products were eclipsed by a nearly 30 percent reduction in average selling prices in the second quarter. Cost decreases for DRAM products approximated the decreases in average selling prices, resulting in relatively stable gross margins for DRAM products when comparing the second and first quarters of fiscal 2007. The Company's sales of CMOS image sensors in the second quarter decreased from the first quarter due to weakness in the mobile handset market, increased competition and shifts in market mix towards lower value VGA-based camera phones.

Steve Appleton, Micron Chairman, CEO and President, commented, "Notwithstanding current, challenging market conditions, the size of the markets for our semiconductor products continues to grow at an impressive rate. Our broad product portfolio, coupled with our expanded capacity, leaves us well positioned to leverage our investments in technology."

In the second quarter, the Company received proceeds of $309 million from incremental equipment financing and capital contributions from joint venture partners of $259 million. The Company ended the second quarter with $2.2 billion in consolidated cash and short-term investments. Subsequent to quarter end on March 30, 2007, the Company acquired the ownership interest in TECH Semiconductor previously held by the Singapore Economic Development Board with the resulting ownership interest held by the Company increasing to 73 percent.

The Company will host a conference call today at 2:30 p.m. MDT to discuss its financial results. The call, audio and slides will be available online at http://www.micron.com A webcast replay will be available on the Company's Web site until April 4, 2008. A taped audio replay of the conference call will also be available at (973) 341-3080 (conference number: 8533070) beginning at 5:30 p.m. MDT today and continuing until 5:30 p.m. MDT on April 11, 2007.

Micron Technology, Inc., is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets DRAMs, NAND flash memory, CMOS image sensors, other semiconductor components, and memory modules for use in leading-edge computing, consumer, networking and mobile products. Micron's common stock is traded on the New York Stock Exchange (NYSE) under the MU symbol. To learn more about Micron visit http://www.micron.com

[Gamble]

Put in Layman's terms:

They increased production, which lowered their super high prices, which is why memory prices are down about $50-$100 right now.

But the bad is that they will have to sell much more to make up for their lowered prices, and didn't this quarter, which made the $53 million loss.