FOOL CONFERENCE CALL SYNOPSIS*
By Dale Wettlaufer (MF Raleigh)

MICRON TECHNOLOGY INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MU)") else Response.Write("(NYSE: MU)") end if %>
8000 S. Federal Way
Boise, ID 83707
(208) 368-4000
http://www.micron.com

WASHINGTON, D.C., (March 17, 1997) /FOOLWIRE/ -- Micron Technology, Inc., today reported net income of $143 million, or $0.66 per fully diluted share, on net sales of $876 million for the second quarter of fiscal 1997, ended February 27. The Company's operations, exclusive of non-recurring gains from the sales of investments, realized earnings of $0.18 per fully diluted share. The Company's semiconductor memory operations contributed $0.10 toward consolidated net income on net sales of $402 million in the second quarter. Hosting the conference call to announced results were Chair and CEO Steve Appleton; Investor Relations Officer Kip Bedard; Vice President of Sales, Don Baldwin; and CFO Bill Stover.

FINANCIAL HIGHLIGHTS. The sale of Micron Electronics stock resulted in net proceeds to Micron Technology of $248 million, which reduced the company's stake in Micron Electronics to approximately 64%. Of note during the quarter was an improvement in semiconductor gross margins, from 24% in the first quarter to 32% in the second quarter. This improvement was accomplished amidst an erosion in average selling price of 18% and was the result of a 55% increase in megabit production from last quarter. Output increased due to further introduction of shrink DRAMs, principally in 16 Megs, and in fabrication efficiencies in the company's Boise, Idaho fab. Inventory levels stayed constant compared with last quarter. As of the end of Q2, total assets increased to just over $4 billion, with cash and investment balances of $559 million. At quarter end, the company had no borrowings under its line of credit.

DON BALDWIN, VP OF SALES. Despite what is normally one of the slower seasons of the year, finished goods inventory ended the quarter at 2-3 days run-rate sales of 16 Megabit units. The company has given end-of-life notice on its 4 Meg unit to customers. Current wafer starts will give the company something in the range of three million units/month range by the summer timeframe. The ASPs on the 4 Meg device have rebounded from a low during the quarter of $1.60 to the low-mid $2 range at the end of the quarter. The company remains concentrated on the 4 X 4 version of the device, but both the 4 X 8 and 4 X 16 are ramping fairly quickly, since the company will be using those devices for some of the 4 Meg support they are phasing out. ASPs on the 16 Meg rebounded significantly at the end of the fiscal quarter. Contract pricing hit a low of $6.40-7.00 during the quarter while spot pricing dropped to just under the $6 mark. Today, the company is seeing contract prices in the low-mid $7 range and spot pricing in the mid-upper $9 range.

Although sales of the 16 Meg SDRAM in Q2 were not significant, the current wafer output from the fab will equate to somewhere in the range of 2.3-2.5 million units shipped during the current quarter. The company is comfortable with the run-rate and doesn't anticipate altering that start-rate until Intel's chipset/processor strategy is better understood for the latter part of 1997.

Wafer starts on 64 Meg DRAM have been increased slightly to help with demand from higher-end PC customers, mainly for file servers and notebook applications. "It is clear that the 16 Meg is the current workhorse for the desktop PC. Barring any dramatic market shifts, the wafer start changes for 64 Meg will be on a very gradual basis." The company looks for flash to start impacting sales numbers in fiscal Q3. Wafer starts for flash have reached the level where sales can commence. The company's focus remains on the 2 and 4 Meg products, which incorporate "smart voltage" technology, which are compatible with similar devices from Intel. The flash product line will be expanded with an 8 Meg boot block device in June and a 4 MB compact flash card at the same time.

QUESTION & ANSWER SESSION. The company increased bit growth over 50% in the quarter and will start the quarter with bit growth in the 15-20% growth.

Supply at the end of the quarter "virtually dried up overnight." The company wouldn't speculate as to all the causes, besides acknowledging the well-known circumstances of Korean companies either holding inventory or cutting back production. Demand during the current quarter is somewhat stronger than at the end of Q2.

IF spot pricing holds, the company will probably see contract pricing come up. Customers expect that to happen if supply doesn't come into the market and two of the company's users are anticipating price increases over the next couple months.

The fab will be making an intermediate step to 0.35 micron to 0.30 micron shrink parts and then head down to 0.25 micron in the late spring or summer.

Since pricing decreasing quarter/quarter, gross margin improvements in semiconductors came about wholly due to shrinks, throughput, and a slight increase in wafer output.

Capital expenditures are budgeted for $600-650 million for the full year.

About half of semiconductor sales were made under contract agreements and 50% in the spot market.

The company continues to optimize its 8-inch line and is not planning on increasing capacity over the next couple quarters -- bit growth will come from shrinking devices.

Almost all revenue comes from 0.35 micron process right now; significant revenues from 0.25 micron will not be seen until 1998.

ASPs for the quarter averaged $2 for 4 Meg devices and $7.55 for 16 Meg devices. Most of the production, in wafers and units, was 16 Meg during the quarter.

Depreciation and amortization for the quarter were $117 million and should stay at about that level for the next couple quarters.

SG&A moved up to $95 million, due to growth in PC operations and also due to performance-based compensation. SG&A should move up to the $100 million level this quarter.

Design efforts for 64 Meg parts are being concentrated on X 4, X 8, and X 16 versions of SDRAM.

The 0.30 micron shrink of the 16 Meg part takes die per wafer from the mid-400 range in the 0.35 micron process to a little over 600 die per wafer.

The company's target wafer output per week for the year is 15,000 per week.

Year-to-year bit growth for the quarter was just over 300%.

The company will need to see sustained strength before increasing capital expenditures on the Lehigh plant.

64 Meg devices will start taking off late in the year and begin to ramp heavily in Q1-Q2 of 1998, though the company sees 16 Mbit DRAM being the workhorse through calendar 1998.

PC sales and DRAM sales each contributed about 45% to revenues this quarter, while other revenues, principally contract manufacturing, approached 10% of total revenues.

The company expects to have an effective tax rate of 40% for the balance of 1997.

When the company refers to their selling in the spot market, it's referring to sales to second-level PC manufacturers. The company will keep the selling mix where it is now.

Bit output for 4 Meg parts was down 50% quarter-to-quarter.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.