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February 23, 1988

MICRON TECHNOLOGY POISED TO WIN BIG FROM CRITICAL MEMORY CHIP SHORTAGE

By CBR Staff Writer

One of the few beneficiaries of the continuing shortage of 256K dynamic RAMs is the one surviving US memory chip manufacturer, Micron Technology Inc (CI No 860). Sales are booming for the Boise, Idaho-based company, according to its marketing manager Gene Cloud. The company was reluctant to give exact production figures, but says that combined production of 256K and 64K memory chips is now running at between 5m and 7m a month. It is still receiving more orders than it can deal with however, and fresh customers are receiving only a small percentage of their order. We are receiving some ridiculous offers, said Cloud, but we’ve got to support our regular customers. Long term contracts are subject to a quarterly price adjustment, and prices are going up. Gene Cloud said that he expected demand to remain exceed supply for the remainder of this year, and well into 1989. The company has for the last five months turned some of its capacity over to the production of a 1M-bit chip. Production quantities have been small, but are doubling month by month. Not surprisingly the company’s most recent quarterly figures showed a net profit of $8.4m, against a loss last time of $9.7m and the share price closed at a 12-month high of $18.625 on Monday, up from $12.50 when we broke the story of the shortage on February 4. The shares were trading at around $14 at the end of 1987, before there was any hint of a shortage, so there could be still more to go for at $18 or so.

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