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Stock Analyst Update

Lower DRAM Prices Slam Micron Technology

Memory chipmaker's second-quarter results come in far below estimates.

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In a commodity business like memory-chip manufacturing, success is often a matter of feast or famine. Micron Technology's (MU) fiscal quarter, ending February, was no exception to the rule.

Micron is a classic example of what is known as a price-taker. The company is one of the largest suppliers of dynamic random access memory (DRAM) chips, which are most commonly known for their use in PCs. Largely a commodity in the semiconductor industry, DRAM makers like Micron Technology have a hard time turning a decent profit when DRAM prices are low--as the company experienced in its most recent quarter.

Jeremy Lopez does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.