Micron Boosts Prices on Memory Chips

Micron Technology Inc. said Friday that it raised prices on memory chips for the first time in three years as demand picked up and supply has tightened after years of oversupply and weak demand that sent prices reeling.

The top U.S. maker of computer memory processors said contract prices--long-term agreements with top personal computer makers--for 64-megabit memory have risen to more than $8 from $7.60 just a few weeks ago.

“We were able to pass through some price increases to the tier-one accounts,” said Micron Vice President Kipp Bedard in a presentation at the NationsBanc Montgomery Securities Conference in San Francisco. He said contract pricing has been unchanged since July. Tier-one accounts are the top PC makers such as Compaq Computer Corp. and Dell Computer Corp.

Shares of Boise, Idaho-based Micron rose $1.50, or 5.3%, to close at $29.88 on the NYSE. The shares fell as low as $20.13 in mid-June.

Memory prices have been plummeting as PC makers slowed orders earlier this year. Now that excess inventory of PCs has been whittled down, demand has picked up again, which has resulted in higher spot prices for memory chips in the past few months. Spot prices refer to buying memory chips without a long-term contract.

Contract prices have been falling for months, with some products seeing declines of 70% in the past year. Most of Micron’s products are sold at contract prices because large PC makers like to lock in prices for big quantities.