Micron's plans for new plant haven't materialized

Micron Technology's plans for building a new 300-millimeter fabrication plant remain unrealized five months after the company announced it would build the plant in Boise.

City building officials said this week that Micron has yet to submit any plans for the new fab.

"We haven't heard from them," said Jenifer Gilliland, Planning and Development Services building manager.

Micron last March said the new plant in Boise would build computer memory chips on 12-inch, or 300-millimeter, silicon wafers rather than the costlier 8-inch, or 200-millimeter, wafers it has used for years.

The company said then that its expansion would be tied to market conditions. Those conditions continue to deteriorate because of a worldwide glut of dynamic random-access memory, Micron's principal product.

The waning future for 200-millimeter wafers was highlighted last week by news that Hynix, the world's second-largest memory chip manufacturer, will shutter its 200-millimeter Eugene, Ore., plant by the end of next month, shedding more than 1,100 employees.

In Boise, rumors have circulated about the fate of 200-millimeter production here - and the future of workers who help fabricate those chips. With the new plant still in limbo, experts believe fewer employees will be needed to produce fewer memory chips.

Micron spokesman Dan Francisco declined to comment, but issued a statement to KIVI-TV (Channel 6).

"There is nothing additional to say about staffing changes," the statement said. "It continues to be a challenging time for Micron. The global markets that our products are sold into continue to experience severe oversupply and price degradation. Because of this, Micron has been pursuing a number of initiatives to drive greater cost efficiencies and revenue growth across our operations.

"These initiatives include developing production cost efficiencies closer in location to Micron's global customers, evaluating functions more efficiently performed through partnerships or other outside relationships, and reducing the company's overhead costs to meet or exceed industry benchmarks. Micron is pursuing these initiatives to support the long-term global viability and competitiveness of the company. This is a process that we continue to work through, and it is a process that takes time."

Analyst Bill Dezellem of Yakima-Wash.-based Tieton Capital Management, warned against jumping to any conclusions about the fate of workers now involved in 200-millimeter production.

"That (Boise) fab could still be used for manufacturing image sensors or speciality products," Dezellem said.

An Idaho Department of Labor spokesman said Micron has not notified the state about any pending layoffs. The federal Warn Act requires employers to give 60 days notice when planning to close a plant or cut more than 500 jobs.

"But, then, they (Micron) didn't tell us anything last time," said department spokesman Bob Fick, referring to the chip maker's layoff of an estimated 1,500 workers in the last year. Instead, Micron paid the law's penalty - at least 60 days' pay for the laid-off workers.

The planned 300 mm fabrication plant would take more than a year to build, said Boise economist John Church.

Micron continues to struggle with market conditions that have caused it to lose money for six consecutive quarters. Company officials and industry analysts have been encouraged by the fact that improving second-quarter prices for dynamic random-access memory carried over into the third quarter of the year.

That optimism has done little for Micron stock, which closed at $5.27 a share, down 12 cents Monday on the New York Stock Exchange.

Joe Estrella: 377-6465