8-KOther Events

MICRON TECHNOLOGY INC 8-K Report (Jul 10, 2001)

Filed July 10, 2001For Securities:MU

Summary

Micron Technology, Inc. filed this Form 8-K on July 10, 2001, primarily to restate its consolidated financial statements for the year ended August 31, 2000, and preceding years. This restatement is due to the disposition of its PC Operations by its subsidiary, Micron Electronics, Inc. (MEI), which occurred in May 2001. The report also includes an updated Management's Discussion and Analysis (MD&A) and a revised Description of Business reflecting these changes. Key operational updates include the full acquisition of KMT Semiconductor, Limited, and the pending merger of MEI with Interland, Inc., which is expected to result in Micron's ownership stake in MEI decreasing to 40% and an estimated loss of $35 million. The report highlights the company's core semiconductor memory business, with DRAM constituting the vast majority of its sales, and discusses its manufacturing capabilities, R&D efforts, and market challenges including intense competition and price volatility in the DRAM market.

Key Highlights

  • 1Restatement of 2000 and prior financial statements due to the disposition of PC Operations by subsidiary MEI.
  • 2Updated Management's Discussion and Analysis and Description of Business to reflect the disposition and other developments.
  • 3Acquisition of Kobe Steel, Ltd.'s 75% interest in KMT Semiconductor, Limited, making it a wholly-owned subsidiary.
  • 4Micron Electronics, Inc. (MEI) is set to merge with Interland, Inc., which will dilute Micron's ownership and likely result in a ~$35 million loss.
  • 5Semiconductor Operations, primarily DRAM, remain the dominant revenue driver, representing 99% of net sales in 2000.
  • 6The company is advancing its manufacturing process technology, moving towards .15 micron and .13 micron line-widths.
  • 7Significant ongoing litigation with Rambus, Inc. concerning patent infringement is detailed, with potential for material adverse effects.

Frequently Asked Questions

Micron's financial statements for the year ended August 31, 2000, and prior years are being restated primarily because its subsidiary, Micron Electronics, Inc. (MEI), disposed of its PC Operations in May 2001. This requires reclassifying the financial results of the PC business as 'discontinued operations'.

The merger between MEI and Interland will reduce Micron's ownership stake in MEI from approximately 60% to 40%. This dilution means MEI's financial results will no longer be consolidated into Micron's statements. Micron estimates it will recognize a loss of approximately $35 million upon completion of this merger.

Micron faces significant risks including the high volatility of the DRAM industry, dramatic declines in average selling prices (ASPs) for memory products, increased worldwide DRAM production leading to further price declines, and dependence on the PC market. Additionally, the company is involved in ongoing patent litigation with Rambus, Inc., which could have a material adverse effect on its business.

Micron's Semiconductor Operations focus on DRAM, with a product mix shifting towards higher density products like 128 Meg SDRAM and developing DDR SDRAM and RDRAM. The company is actively transitioning its manufacturing process technology to more advanced .15 micron and .13 micron line-widths to improve efficiency and product performance.