Micron Technology Inc.'s $43 million third-quarter profit reported Wednesday could foreshadow bigger things.
A combination of an improving memory chip market and Micron's acquisition of bankrupt Japanese competitor Elpida Memory Inc. could lead to profits nearing a half billion dollars in the coming quarter, said Mike Howard, a semiconductor analyst in Boise with IHS iSuppli and a former Micron employee.
"Micron will be in a position to start printing money, at least over the next 18 months," Howard said.
Micron reported $2.3 billion in sales, compared with $2.2 billion during the same quarter of 2012. Its stock closed Thursday at $13.97, the highest since $13.98 in July 2007. The company reported earnings after stock markets closed for the day.
The company languished for two years with the rest of the memory chip industry, reporting $1.7 billion losses over the previous seven quarters as a glut of inventory drove chip prices down. Micron reported a $320 million loss in the same quarter a year ago and a $286 million loss in the previous quarter.
In the past two months, the market has turned for Micron's two primary products, dynamic random access memory and flash memory.
Dynamic random access memory sales revenue rose 23 percent in the quarter, thanks to a 16 percent increase in average selling prices and a 6 percent increase in sales volume. Flash memory sales revenue increased 7 percent, thanks to an 8 percent selling price increase.
While declining to predict future profits, Micron President Mark Adams told investors in a conference call that the company is well-positioned.
"The market for DRAM and (flash memory) remains in good balance, and we look forward to a strong (fourth quarter)," Adams said.
Howard was more bullish. The $43 million profit seems modest until matched with the company's $329 million turnaround from the second quarter, he said.
Micron's increased potential stems from acquisition of Elpida, whose DRAM competed with Micron's, with both companies hovering between 10 and 13 percent of the market, Howard said.
After the acquisition, Micron may rival South Korean chip maker SK Hynix Inc., the No. 2 DRAM producer with around 25 percent of the market, Howard said. South Korea's Samsung Electronics Co. leads the DRAM industry with about 40 percent of the market, he said.
Howard said the timing of the Elpida purchase couldn't be better.
"If Micron were completing the acquisition a year and a half ago, you would have thought DRAM would have dragged them to the bottom of the river," he said. "But, now, it's a great market to be in, and Micron is going to double its market share. Micron will look like geniuses."
DRAM is the most common type of memory in personal computers. It loses data without power. Flash memory, which retains information after being turned off, is used in smartphones and other mobile devices as well as solid state drives in computers.
Micron employs 25,000 people, including 10,000 in the U.S. About 5,600 are at the company's Boise headquarters.
Zach Kyle: 377-6464