Ask About Computers Blog

Micron lost $225 million from March through May. Management nevertheless remained upbeat at a recent conference.

Memory companies are at the mercy of the laws of supply and demand. In this case, it wasn’t demand that drove prices down. It was supply, or rather oversupply.

Over the same period, Micron increased bit shipments by 30%. This “could not have been achieved in a weak demand environment”.

Prices still dropped 35%. The primary reason for the oversupply was a lot of memory manufacturers made a lot of memory in the first quarter. “Q1 was a huge output quarter”.

In spite of the recent and prolonged oversupply in memory, Micron continues to increase output of DRAM and NAND. Demand was healthy, and demand tends to increase in the second half with the back-to-school and holiday seasons.

Micron is ramping NAND flash memory like crazy. The company recently increased its output by 75% and hopes to increase it 50% more in the near term.

Good thing too, since NAND sells almost as fast as it’s made. Said one executive, “In the NAND Flash area, we are hand to mouth”.

That’s “less than one week of supply”.

Memory manufacturers have the ability to switch back and forth between making DRAM and NAND.

While they could convert as much as 90% to 95% of their equipment to make either type of memory if they wanted, in practice memory makers only convert “10% or 20%, or some number like that”.

This takes three to four months. It “really does take just the cycle time of a wafer fab”.

Micron also manufactures image sensors for digital cameras. It does so, however, using older technology. The size of the silicon wafers is smaller, and the tool set is older by a generation or two.

This is good use of old equipment, which would otherwise have to be sold.

Micron uses state-of-the-art or near state-of-the-art technology to manufacture memory. When it can no longer do so cost effectively, it uses the equipment for image sensors. That “tool set has already used its life so to speak for us on the memory front”.

Micron, Seeking Alpha

NVIDIA has emerged from its first quarter following the completion of AMD’s acquisition of ATI.

ATI was and still is NVIDIA’s chief rival in graphics, and the results were not surprising.

NVIDIA posted stellar results.

AMD and its ATI division have their hands full with the merger, leaving NVIDIA as practically the only company to concentrate on graphics.

NVIDIA especially has high-end graphics almost entirely to itself, and high-end graphics processors are high-margin parts.

Have you seen benchmark comparisons between NVIDIA and ATI graphics cards lately?

Source: NVIDIA Reports Record Results for Fourth Quarter and Fiscal Year 2007

Seagate had their first $3 billion quarter and 30% revenue growth year over year.

That being said, their net income was way down.

This may have been due to the effects of the Maxtor acquisition, which is supposed to now be complete.

Seagate saw “better than expected desktop pricing”.

This is odd, since the desktop is not a growth segment.

It must be that the demand for storage is growing really fast, possibly because of multimedia content that needs to be stored.

The computing industry appears to be growing. Among other things, Seagate shipped a record “7 million disc drives for consumer electronics applications”.

The mobile sector appears to be growing. Seagate increased “shipments into the mobile compute market by 52% year-over-year”.

Traditionally, there have been 3.5″ desktop drives and 2.5″ mobile drives, and more recently 1″ hard drives for the CE market.

However, Seagate is working on a brand new 1.8″ form factor disk drive.

One notable thing that happened in the fourth calendar quarter was “the start of OEM qualification of Seagate’s 1.8-inch products”.

Source: Seagate Technology Reports Fiscal Second Quarter 2007 Results