Micron's capital spending budget was targeted for $1.5-to-$2 billion in 2009. Now, amid a memory downturn, the company's capital spending ''will be more like $750 million to $1.5 billion,'' said analyst Doug Freedman of American Technology Research Inc., in a report.

''The main thing is that half its original capex was going to be for IMFT,'' he said, referring to IM Flash Technologies LLC, the joint NAND production venture between Micron and Intel Corp. ''That's now off the table.''

Besides the memory woes, Micron was also looking for a private-equity deal, as a means to spin off its CMOS image sensor unit, dubbed Aptina. Micron turn that unit into an independent operation in recent times.

''Retail NAND appears to remain in an oversupplied situation, with significant card inventory in the channel. We believe it will take some time to be cleared, and retail will be challenging for some time,'' he said.

On the DRAM front, ''demand holding up 'pretty good,' '' he said. ''Bit consumption for Q3 should be just about what customers indicated. The problem is supply. The spot market has gotten crushed. The contract market has been decent. There are still two DRAM makers with positive gross margins. Most are losing 30 percent plus.''

This has impacted Micron's bottom line and capital spending, especially at IM Flash. Intel and Micron have recently pushed out the production date of its next NAND fab, which is located in Singapore. IM Flash currently produces NAND devices in a 300-mm fab in Utah.

By: DocMemory
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