Micron will lay off 500 of its employees in the short-term, with up to as many as 2000 of their employees facing possible layoffs in 2009.
Memory chip manufacturers are being beaten down by the excessive oversupply in the market, ridiculously low prices, and, according to Micron executives, a weaker holiday season that expected. Micron's quarterly losses doubled and Micron plans to cut capital spending by over a $1B.
Memory suppliers are being hit hard by an oversupply in the memory market which has driven prices to record lows. DRAM prices are down 43% and NAND prices are down 61% since June 2007, and the economic slowdown in the US is only aggravating the problem. Semiconductor sales in June were up only .5% y-o-y, but when memory is excluded from that calculation, all other semiconductor sales were up 12%.
Micron shares fell after receiving a BB- credit rating from S&P. The low rating was attributed to difficult market conditions.
Intel and Micron released a new high speed memory chip that will be used for digiltal video cameras as well as hard drives. The companies say that the new chip is 5x faster than conventional NAND flash memory.
Micron’s shares fell after the company reported a net loss of $158 million. The losses were a result of price decreases in both DRAM and NAND.