Since Micron Technology Inc. announced more layoffs in October, some analysts have suggested that Idaho's largest private employer isn't finished cutting either jobs or computer-chip production in Boise.

The company's recent strategic decisions have fueled that belief. Days after Micron announced that it would shut its flash-memory production line in Boise and end 1,500 more Treasure Valley jobs, Micron bought a stake in a Taiwanese manufacturer of dynamic random-access memory, or DRAM, Micron's principal product.

That move was praised by industry analysts, but it led some to conclude that Micron is moving production out of Idaho - and that a long-hoped-for, state-of-the-art fabrication plant might never be built in Boise.

In the last year, Micron has invested nearly $1 billion to buy existing production capacity in Asia. With smaller competitors fighting for survival, Micron may continue to grab capacity on the cheap instead of building new fabs at full price.

Newer plants, like the Inotera plant in Taiwan that Micron just bought a share of, build computer memory on 12-inch, or 300-millimeter, silicon wafers, which can turn out more chips at less cost than the 8-inch (200-millimeter) wafers used in Boise now.

The deal to buy struggling German competitor Qimonda's stake in a plant in Taiwan may be a precursor to acquiring a large chunk of Qimonda and its remaining capacity, according to a Nov. 17 story by the Reuters news service. Reuters quoted a German business magazine that said Micron could acquire Infineon's 76 percent stake in Qimonda, and the purchase price of the Taiwan plant would be credited against the purchase.

The global semiconductor industry is restructuring in the wake of falling demand and plummeting prices for DRAM and flash memory chips, Micron's primary products. DRAM is the most common type of memory used in computers. Flash memory, unlike DRAM, retains data when devices are turned off. Flash memory is used in cameras and music players like iPods.

Hynix, the South Korean company that is the world's second-largest DRAM maker, is closing older plants and reducing output. Hynix recently closed its last U.S. production facility in Eugene, Ore.

Micron has posted seven straight quarterly losses, including a $344 million shortfall in the fourth quarter of 2008.

"Several DRAM vendors face possible extinction," said the Electronic Engineering Times, a weekly magazine, in a recent report. "Germany's Qimonda AG is headed towards 'insolvency,' according to one analyst. Elpida, Hynix and Micron are struggling and losing money, while Taiwan's DRAM suppliers - especially Powerchip, ProMOS and others - may not survive the storm."

Micron keeps driving down costs to survive. Labor is cheaper in Asia, and plants there are nearer to the computer manufacturing plants operated by some of Micron's key customers.

Company executives called a news conference in March to say they planned to build a 300-millimeter fab in Boise, though they didn't say when. Local officials welcomed the news.

Micron first hinted at a new $1 billion plant in early 2005. Chairman and Chief Executive Officer Steve Appleton's announcement helped pave the way for Micron to receive significant tax breaks from the Idaho Legislature that year. Lawmakers capped Micron's property tax value at $800 million and eliminated sales taxes on research and development equipment.

If Micron halted its remaining Boise production, a few thousand more people could be thrown out of work. Micron will employ about 7,500 in Boise after most recent cuts have been completed, down from about 11,000 a few years ago.

During a conference call with analysts in August, Appleton said the company was committed to maintaining corporate and research and development operations in Boise, where Micron began in 1978. He offered no such commitment for manufacturing.

When Micron announced its latest layoffs Oct. 9, President Mark Durcan said plans for a new fabrication unit in Boise are "aspirational" and aren't likely to happen anytime soon.

After flash output ends, most of Boise's remaining manufacturing appears to be memory products that will eventually be replaced with newer technology. These "legacy" parts can be economically produced on 200-millimeter wafers and still generate cash, which Micron needs to weather the recession, but the market for them is limited. Outside estimates for the viability of the current product line are two years. Some say production will stop sooner.

"They are making lower-density 64-megabit, 128, maybe a little 512-megabit, DRAM on 200-millimeter lines," said Jim Cantore, president and chief analyst of JLC Associates in San Francisco, a technology consulting firm. Cantore worked for Micron as a product marketing manager in 1999.

Some products - routers, communications products, even some aerospace systems - have no use for large amounts of memory, and the older chips remain part of their designs. But the leading edge of DRAM is 1 gigabit, and soon producers will be shipping 2-gigabit chips, he said.

More bits per chip translates to more storage capacity in the same amount of space.

Micron's low-density chips "are pretty much dinosaurs," Cantore said.

There is still money to be made in legacy chips in part because there is less competition, Cantore said. Hynix does produce some legacy products, although it has announced the closing of all but one of its 200-millimeter fabs this year.

"Sometime in the future Micron will have to follow suit," Cantore said. "But for the time being, the Hynix shutdowns put them in a good position as a source for these legacy DRAM products for the next year, maybe two."

The Inotera purchase "should take care of Micron's production needs for the next year," he said.

Bill Dezellem with Tieton Capital Management in Yakima, Wash., agrees. Dezellem remains bullish on Micron's survival in Boise. The Inotera purchase creates security for Micron by lowering its costs and making it easier to invest in research and development, he said.

But even Dezellem doesn't think Boise is a likely site for a new fab.

"There is more space in Lehi (Utah)," he said. "Ultimately, it is a function of where the customer is. If they remain in Asia, that's where they (chip makers) will build."

Some people closer to home are more pessimistic.

Richard Slaughter, former state chief economist under Gov. John Evans and now a Boise economic consultant, said he would not be surprised to see Micron disappear from the Boise area in the next three to five years. He points to the company's lack of investment in Boise and its overseas expansion as evidence of the company's intentions.

"Micron is likely to go away," Slaughter said.

Gov. Butch Otter's former commerce director, Jim Ellick, created a stir in January when he said the state should have an alternate budget prepared in the event Micron leaves.

The Idaho Commerce Department is aware of the speculation about Micron but doesn't have plans to address the potential loss of jobs or economic activity, spokeswoman Bibiana Nertney said. Instead, the department is focusing on Otter's plan to expand the state's economic output to $60 billion from $51.5 billion. Micron declined to comment.

Brad Talbutt: 377-6737