Micron expects to see further consolidation in the DRAM industry, according to its CEO, Steve Appleton.
“As they (competitors) continue to weaken, they're going to have to figure out what they're going to do,” says Appleton, “and so I think that will drive some further consolidation. I think that's inevitable.”
A possible target for Micron is Nanya of Taiwan its joint development partner. Micron already has a jv with Nanya in another Taiwan DRAM maker, Inotera, which, like Nanya, is owned by Formosa Plastics, the island’s largest company.
Micron has acted as a consolidator before, buying the Intel-ST flash jv Numonyx and TI’s DRAM operation. It took a long look at Hynix a few years back but declined the opportunity to buy it.
Appleton says the Numonyx acquisition paid back its investment quickly.
Macro-economic worries, the move from PCs to tablets and the Thailand flooding affecting HDD supply all negatively impacted Micron’s DRAM sales in the September/October/November quarter.
Constrained supplies of HDDs led to a 10-15% drop in demand for DRAM, says Appleton.
DRAM weakness delivered a loss of $187m on sales of $2.1bn compared to a prior quarter loss of $135m on sales also of $2.1bn. A year ago in the same quarter it made a profit of $155m on sales of $2.3bn.
NAND sales grew 6% q-o-q due to an 18% increase in sales volume offset by a 10% decrease in ASP.
Unchanged DRAM revenue from the prior quarter reflected a 14% increase in sales volume offset by a 12% drop in ASP.
NOR sales were 14% of total sales.
The company’s capex for the quarter was $750m and its cash at the end of the quarter totalled $1.9bn.
Micron estimated DRAM inventory as 4-5 weeks but described NAND inventory as ‘below a healthy level’ as demand for NAND in SSDs picked up following the Thailand flooding.