Aug. 13 (Bloomberg) -- Micron Technology Inc. Chief Executive Officer Mark Durcan said he expects the market for chips that store files in mobile devices to improve in the first half of 2013 as manufacturers rein in supply increases.
The capacity gains that have caused an industry glut are abating, Durcan said in an interview. Toshiba Corp. said last month that it will reduce production of so-called Nand flash memory, fueling optimism that supply will better match demand next year, Durcan said by telephone.
“I’m optimistic about the first half of next year,” Durcan said. “There’s been some pretty significant announcements.”
Boise, Idaho-based Micron reported its fourth-straight quarterly loss in June as chip manufacturers struggled to match production capacity with fluctuations in demand for personal computers, mobile phones and tablets.
Supply of chips for personal computers will grow 25 percent this year, a historically low increase. That will limit supply of chips in a PC market suffering slowing demand in a weakening economy, Durcan said.
Durcan, who has been at Micron for 28 years, said the industry is reaching the limits of its ability to improve output by shrinking the microscopic circuit lines on chips.
Device makers, whose products are also getting smaller, are also demanding combinations of memory chips and other semiconductors closely packed together, making the ability to supply customized products more important, he said.
“Both of those create an opportunity for a more profitable business for those that are successful in the memory space,” said Durcan. “We feel we’ve got the right set of capabilities.”
In July, Micron said it agreed to acquire bankrupt Elpida Memory Inc. for 200 billion yen ($2.55 billion). The transaction is aimed at grabbing control of more supply and making it better able to take on industry leader Samsung Electronics Co.
Elpida bondholders plan to submit a filing to Tokyo District Court saying the company is worth more than Micron’s proposed offer, at 300 billion yen, said a person familiar with the matter, who declined to be identified because the plan isn’t public.
Micron’s Durcan said today that his company’s offer is fair and the best one available in a “difficult memory market.”
No one was available at Elpida to comment after office hours.
Shares of Micron fell 0.7 percent to $6.72 at the close in New York, leaving them up 6.8 percent this year.
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