Sales slump forces Micron to cut jobs.

Byline: From The Register-Guard and news service reports

Nearly 10 months after it tried to buy the Eugene Hynix factory, Boise-based Micron Technology Inc. is in a financial crunch and cutting staff.

Micron, the world's second-largest maker of computer-memory chips, said it will eliminate about 10 percent of its work force, or close to 1,870 employees, amid slumping sales and falling prices.

Most of the cuts will take place in the next seven days. Micron may rehire some of the workers if business improves, spokesman David Parker said.

It's Micron's first layoff since 1985.

``We have tried to do anything possible other than a layoff to constrain our cost structure,'' Appleton told the Idaho Statesman newspaper. ``The fact is, the market hasn't improved. We have a war on the horizon. We have tremendous uncertainty in the marketplace at our customer base.''

While recent price declines of memory chips prompted Micron to cut jobs, other chip makers don't appear to be following suit.

A Hynix spokesman in Eugene couldn't be reached for comment Wednesday. The plant employed 840 workers as of last month, and Farhad Tabrizi, vice president of worldwide marketing, has said those workers would stay on the job during a technology upgrade starting in April.

The spot price of the benchmark memory chip stood at $2.95 on Tuesday, less than half the price at the start of the year. Chipmakers begin losing money when prices fall below $4, analysts have said.

``The market is pretty tough,'' said George Wu, an analyst who follows the industry for Primasia Securities in Taipei. ``Cutting costs becomes a priority to endure and survive.''

Micron has been unprofitable for eight straight quarters on weak demand for personal computers, which account for about 80 percent of memory-chip sales.

In the last two years, the company has reported losses totaling more than $1.5 billion and opened its latest fiscal year with another $315.9 million in red ink as the international chip market remained depressed.

Steve Appleton, Micron's chief executive officer, hasn't received a cash salary since October 2001, and won't receive one until the company turns profitable, according to the company's proxy statement.

The company's share of the memory-chip market for personal computers dropped to 17 percent last year from 19 percent in 2001, while Samsung's share increased to 31 percent from 27 percent, according to market researcher Gartner Inc.

Appleton said the layoffs will be proportional throughout the corporate system.

Micron has about 11,000 employees in Boise, making it the state's largest private employer. The company also has facilities in Utah, Virginia, Italy, Japan and Singapore.