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Micron holds CapEx at ‚??08 levels; shifts spending to DRAM

26 June 2009 | By Mark Osborne | News > Cleanroom

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Still in spreadsheet preservation mode after 10 sequential quarters of financial losses, Micron Technology has said that it will maintain capital spending at 2008 levels during its next financial year, which starts next quarter. According to Micron’s CFO, Ronald Foster in a scheduled quarterly conference call to discuss FY3Q09 results, CapEx would be in the range of US$650 million and US$700 million. Spending so far in its current financial year has reached US$566 million, with US$93 million spent in the last quarter.

Mark Durcan, Micron’s President said in the call that spending would be split approximately 65% on DRAM production and only about 35% on NAND. Durcan noted that the focus on DRAM was due to the need to spend on lithography and related technology buys for TECH in Singapore to make a full transition to 50nm DRAM production. Spending on NAND would be considerably reduced as he claimed the company had made the vast majority of technology purchases for 34nm production, which has started and will be aggressively ramped.

Durcan also noted that the upfront costs in NAND had included several technology nodes such as copper processing, immersion lithography and double patterning.

“So we are well down the path in terms of having all the tooling in place and that's why you see a relatively low maintenance capital spend for Micron on a go-forward basis,” noted Durcan. “Obviously if there are significant changes in the marketplace we will take a look at whether or not there are additional things we want to do from a capex perspective. But we think we are in great shape to continue advancing our technology and driving down costs with a relatively small CapEx spend.”

Micron had revised downwards CapEx plans in December, 2008 to approximately US$750 million, compared to US$1.3 billion.

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