The Motley Fool Take
Mourn Micron's Memory

Poor Micron Technology (NYSE: MU) can't catch a break these days.

Despite much higher unit volumes in every product category, Micron's recently reported gross profit was a meager $5 million on $1.54 billion in sales.

It's all part of a vicious circle. Expecting Microsoft's Windows Vista to drive a massive upgrade cycle among the computer users of the world, memory makers started churning out huge quantities of memory chips, which drove down selling prices. Vista has been successful enough to boost Microsoft's own sales and profits, but not nearly as much as the memory industry and other hardware makers had expected.

This is beyond Micron's control. Stop the factories for a month, and you'll lose out on tons of sales, mindshare and market exposure. But competitors will continue oversupplying, so you won't help the pricing situation much. All you can do is churn out more chips and hope for a demand spike sooner or later.

Solid-state hard drives could provide that kind of boost over the next year or two. Micron is ramping up its line of these speedy mass-storage devices, hoping to land some notebook customers in the technology's first wave. With enough demand, there might still be hope for memory prices. But it'll take some time. For now, just wait for the market to hit rock bottom before you buy.