Micron Technology Inc. Chief Executive Officer Mark Durcan said the memory-chip industry has scaled back supply enough to stem price declines as soon as demand for components improves.
Its not a long-term issue, Durcan said at a meeting with financial analysts Friday in Boise, where the company is based. Its a short-term issue. If we see any reasonable macro environment this thing sorts itself out pretty quickly.
Micron makes dynamic random access memory (DRAM), used in personal computers, and so-called Nand flash memory, chips for storing data in smartphones. Micron and other suppliers of parts for PCs are experiencing a demand slump as a sluggish economy curbs purchases at a time of the year when the holiday shopping season usually boosts orders.
The shares declined 1.4 percent to $5.67 at the close in New York. The stock has lost 9.9 percent this year.
DRAM prices have fallen more than expected this quarter, while Nand prices gained more than the company had anticipated, said Mark Adams, Microns president.
Durcan also said he expects the acquisition of Japans Elpida Inc. to close in the first half of next year as legal challenges fail to derail the transaction.
I try to put myself in the position of the court in Japan in terms of is there any other viable offer out there, Durcan said in an interview Friday. The conclusion is no, theres not.
Elpidas bondholders are crazy to be trying to disrupt what is clearly the best offer that can possibly come along, he said.
In July, Micron agreed to acquire bankrupt Elpida Memory Inc. for $2.55 billion. Elpida, the last Japanese maker of computer-memory chips, sought bankruptcy protection in February after losses left it unable to pay debts.
The Elpida transaction is aimed at grabbing control of more supply and making it better able to take on industry leader Samsung Electronics Co. as well as South Koreas SK Hynix Inc.