Internal Revenue ~~Service-Employer~~Service—Employer Identification No. 75-1618004

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /x/ No / /

The number of outstanding shares of the registrant's ~~common stock~~Common Stock as of ~~January~~April 5, 2001, was ~~593,340,331.~~596,212,941 shares of common stock.

As of	As of	November 30, 2000		August 31, 2000		As of	March 1, 2001		August 31, 2000
		(unaudited)
ASSETS	ASSETS					ASSETS
Cash and equivalents	Cash and equivalents	$	568.7	$	701.7	Cash and equivalents	$	599.9	$	701.7
Liquid investments	Liquid investments		1,894.8		1,764.7	Liquid investments		1,449.2		1,764.7
Receivables	Receivables		992.6		1,573.7	Receivables		579.4		1,413.1
Inventories	Inventories		1,026.4		704.8	Inventories		1,141.1		688.6
Prepaid expenses	Prepaid expenses		38.9		22.4	Prepaid expenses		34.0		14.9
Deferred income taxes	Deferred income taxes		188.7		137.1	Deferred income taxes		126.0		124.7

	Total current assets		4,710.1		4,904.4	Total current assets		3,929.6		4,707.7
Product and process technology, net	Product and process technology, net		211.9		213.0	Product and process technology, net		216.6		213.0
Property, plant and equipment, net	Property, plant and equipment, net		4,508.5		4,257.6	Property, plant and equipment, net		4,588.6		4,172.3
Other assets	Other assets		371.0		256.5	Other assets		381.9		254.2
Net assets of discontinued PC operations						Net assets of discontinued PC operations		—		66.4

	Total assets	$	9,801.5	$	9,631.5	Total assets	$	9,116.7	$	9,413.6

LIABILITIES AND SHAREHOLDERS' EQUITY	LIABILITIES AND SHAREHOLDERS' EQUITY					LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	1,280.9	$	1,465.8	Accounts payable and accrued expenses	$	739.7	$	1,328.8
Deferred income	Deferred income		58.2		87.9	Deferred income		54.8		83.0
Equipment purchase contracts	Equipment purchase contracts		57.9		45.9	Equipment purchase contracts		44.6		45.9
Current portion of long-term debt	Current portion of long-term debt		50.2		47.9	Current portion of long-term debt		42.4		46.8

	Total current liabilities		1,447.2		1,647.5	Total current liabilities		881.5		1,504.5
Long-term debt	Long-term debt		242.5		933.7	Long-term debt		230.2		931.4
Deferred income taxes	Deferred income taxes		326.6		333.5	Deferred income taxes		306.1		325.1
Other liabilities	Other liabilities		88.6		85.5	Other liabilities		73.6		64.4
Net liabilities of discontinued PC operations						Net liabilities of discontinued PC operations		15.0		—

						Total liabilities		1,506.4		2,825.4
	Total liabilities		2,104.9		3,000.2
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Minority interests			200.4		199.3
Common stock, $0.10 par value, authorized 3.0 billion shares, issued and outstanding 593.0 million and 567.3 million shares, respectively			59.3		56.7
Minority interest						Minority interest		144.4		156.2
Common stock, $0.10 par value, authorized 3.0 billion shares, issued and outstanding 595.3 million and 567.3 million shares, respectively						Common stock, $0.10 par value, authorized 3.0 billion shares, issued and outstanding 595.3 million and 567.3 million shares, respectively		59.5		56.7
Additional capital	Additional capital		3,533.3		2,824.2	Additional capital		3,591.5		2,824.2
Retained earnings	Retained earnings		3,901.9		3,549.6	Retained earnings		3,813.5		3,549.6
Accumulated other comprehensive income	Accumulated other comprehensive income		1.7		1.5	Accumulated other comprehensive income		1.4		1.5

	Total shareholders' equity		7,496.2		6,432.0	Total shareholders' equity		7,465.9		6,432.0

	Total liabilities and shareholders' equity	$	9,801.5	$	9,631.5	Total liabilities and shareholders' equity	$	9,116.7	$	9,413.6

~~See accompanying notes~~2000 amounts have been restated to ~~consolidated financial statements.~~

~~Consolidated Statements of Operations~~reflect separately the discontinued PC operations.
~~(Amounts in millions except per share amounts)~~
~~(Unaudited)~~

2000 amounts have been restated to reflect separately the discontinued PC operations.
See accompanying notes to consolidated financial statements.

For the three months ended				November 30, 2000			December 2, 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net income				$	352.2		$	341.3
Adjustments to reconcile net income to net cash provided by operating activities:
For the six months ended										For the six months ended			March 1, 2001			March 2, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:										CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations										Income from continuing operations			$	355.4		$	521.8
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:										Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
	Depreciation and amortization				274.5			229.5			Depreciation and amortization			540.4			463.1
	Additional paid in capital tax effect from stock purchase plans				6.3			26.1			Additional paid in capital tax effect from stock purchase plans			23.5			84.8
		Change in assets and liabilities:									Change in operating assets and liabilities:
			Decrease (increase) in receivables, net of noncash reclassifications		581.1			(212.7	)			Decrease (increase) in receivables, net of noncash reclassifications		833.3			(197.0	)
			Increase in inventories		(321.6	)		(138.5	)			Increase in inventories		(452.5	)		(316.3	)
			Increase (decrease) in accounts payable and accrued expenses, net of plant and equipment purchases		(158.2	)		219.7				Increase (decrease) in accounts payable and accrued expenses, net of plant and equipment purchases		(538.5	)		115.8
		Other			(117.6	)		83.3			Other			(199.8	)		21.4

Net cash provided by operating activities					616.7			548.7
CASH FLOWS FROM INVESTING ACTIVITIES
											Net cash provided by operating activities			561.8			693.6
CASH FLOWS FROM INVESTING ACTIVITIES:										CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and equipment	Expenditures for property, plant and equipment				(506.8	)		(219.8	)	Expenditures for property, plant and equipment				(894.3	)		(449.1	)
Purchase of available-for-sale securities	Purchase of available-for-sale securities				(791.9	)		(638.0	)	Purchase of available-for-sale securities				(1,475.3	)		(1,123.4	)
Proceeds from maturities of available-for-sale securities	Proceeds from maturities of available-for-sale securities				621.5			564.7		Proceeds from maturities of available-for-sale securities				1,655.6			1,079.7
Proceeds from sales of available-for-sale securities	Proceeds from sales of available-for-sale securities				10.0			24.6		Proceeds from sales of available-for-sale securities				49.7			76.3
Purchase of held-to-maturity securities	Purchase of held-to-maturity securities				(56.7	)		(99.7	)	Purchase of held-to-maturity securities				(75.1	)		(124.3	)
Proceeds from maturities of held-to-maturity securities	Proceeds from maturities of held-to-maturity securities				36.0			33.7		Proceeds from maturities of held-to-maturity securities				132.0			154.9
Other	Other				(49.6	)		1.4		Other				(71.5	)		(51.3	)

Net cash used for investing activities	Net cash used for investing activities				(737.5	)		(333.1	)	Net cash used for investing activities				(678.9	)		(437.2	)
CASH FLOWS FROM FINANCING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES:										CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	Proceeds from issuance of common stock				19.5			51.9		Proceeds from issuance of common stock				60.0			138.4
Payments on equipment purchase contracts	Payments on equipment purchase contracts				(25.3	)		(86.5	)	Payments on equipment purchase contracts				(105.1	)		(150.7	)
Repayments of debt	Repayments of debt				(12.7	)		(34.3	)	Repayments of debt				(24.7	)		(109.3	)
Proceeds from issuance of debt					6.1			—
Other	Other				0.2			0.3		Other				0.9			0.5

Net cash used for financing activities	Net cash used for financing activities				(12.2	)		(68.6	)	Net cash used for financing activities				(68.9	)		(121.1	)
Net cash provided by discontinued PC operations										Net cash provided by discontinued PC operations				84.2			—

Net increase (decrease) in cash and equivalents	Net increase (decrease) in cash and equivalents				(133.0	)		147.0		Net increase (decrease) in cash and equivalents				(101.8	)		135.3
Cash and equivalents at beginning of period	Cash and equivalents at beginning of period				701.7			294.6		Cash and equivalents at beginning of period				701.7			294.6

Cash and equivalents at end of period	Cash and equivalents at end of period			$	568.7		$	441.6		Cash and equivalents at end of period			$	599.9		$	429.9

SUPPLEMENTAL DISCLOSURES	SUPPLEMENTAL DISCLOSURES									SUPPLEMENTAL DISCLOSURES
Income taxes refunded (paid), net	Income taxes refunded (paid), net			$	(258.3	)	$	86.4		Income taxes refunded (paid), net			$	(420.7	)	$	168.1
Interest paid, net of amounts capitalized	Interest paid, net of amounts capitalized				(31.1	)		(35.0	)	Interest paid, net of amounts capitalized				(30.6	)		(54.9	)
Noncash investing and financing activities:	Noncash investing and financing activities:									Noncash investing and financing activities:
	Equipment acquisitions on contracts payable and capital leases				37.3			71.1		Equipment acquisitions on contracts payable and capital leases				104.0			135.1
	Net conversion of notes to equity				684.6			—		Net conversion of notes to equity				684.6			—

2000 amounts have been restated to reflect separately the discontinued PC operations.
See accompanying notes to consolidated financial statements.

For the quarter ended		March 1, 2001		March 2, 2000
Net income (loss)		$	(88.3	)	$	161.3
Unrealized gain (loss) on investments			(0.3	)		38.8

	Total comprehensive income (loss), net of tax		$	(88.6	)	$	200.1

~~Consolidated Statements of Comprehensive Income~~
~~(Amounts in millions)~~
~~(Unaudited)~~

(All tabular amounts are stated in ~~millions except per share amounts)~~millions)

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the consolidated financial position of Micron Technology, Inc., and subsidiaries (the "Company"), and their consolidated results of operations and cash flows. Micron Technology, Inc. and its wholly-owned subsidiaries are collectively hereinafter referred to as "MTI." The Company's PCWeb-hosting and discontinued personal computer ("PC") operations are operated through Micron Electronics, Inc. ("MEI"), ~~a 61%~~an approximately 60% owned, ~~publicly traded~~publicly-traded subsidiary of MTI.

As a result of MEI's plan to discontinue its PC operations, the net assets (liabilities), results of operations and cash flows of the PC business have been reported separately as discontinued PC operations in the Company's consolidated financial statements and previously reported consolidated financial statements have been restated to present consistently the discontinued PC operations. (See "Note 6—Discontinued PC operations.")

Recently issued accounting standards include Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging Activities," issued by the FASB in June 1998 and Staff Accounting Bulletin ("SAB") No. 101 "Revenue Recognition in Financial Statements," issued by the Securities and Exchange Commission in December 1999.

SFAS No. 133 requires that all derivatives be recorded as either assets or liabilities in the balance sheet and marked to market on an ongoing basis. SFAS No. 133 applies to all derivatives including stand-alone instruments, such as forward currency exchange contracts and interest rate swaps, or embedded derivatives, such as call options contained in convertible debt investments. Along with the derivatives, certain underlying hedged items are also to be marked to market on an ongoing basis. These market value adjustments are to be included either in the statement of operations or as a component of comprehensive income, depending on the nature of the transaction. The Company adopted the standard in the first quarter of 2001. The adoption did not ~~affect~~have a significant impact on the Company's results of operations or financial position.

SAB No. 101 summarizes certain views of the SEC staff ~~views~~ in applying generally accepted accounting principles to revenue recognition in ~~the~~ financial statements. Adoption is required for the Company by the fourth quarter of 2001. The implementation of SAB No. 101 is not expected to have a significant impact on the Company's future results of operations or financial position.

These unaudited interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Form 10-K for the year ended August 31, 2000.

		November 30, 2000			August 31, 2000
As of								March 1, 2001			August 31, 2000
Receivables	Receivables
	Trade receivables	$	868.3		$	1,354.2
	Receivables from joint ventures		30.2			79.4
	Taxes receivable other than income		58.1			72.3
	Interest receivable		24.4			18.9
	Other receivables		42.5			87.5
	Allowance for returns and discounts		(18.2	)		(19.9	)
	Allowance for doubtful accounts		(12.7	)		(18.7	)
Trade receivables								$	430.4		$	1,199.1
Income and other taxes receivable									62.2			78.9
Receivables from joint ventures									29.4			79.4
Other receivables									71.3			89.1
Allowance for returns and discounts									(7.3	)		(19.0	)
Allowance for doubtful accounts									(6.6	)		(14.4	)

		$	992.6		$	1,573.7		$	579.4		$	1,413.1

Inventories	Inventories
	Finished goods	$	568.6		$	290.0
	Work in progress		343.9			331.1
	Raw materials and supplies		124.5			96.3
	Allowance for obsolescence		(10.6	)		(12.6	)
Finished goods								$	662.4		$	284.4
Work in progress									386.7			330.6
Raw materials and supplies									105.8			83.0
Allowance for obsolescence									(13.8	)		(9.4	)

		$	1,026.4		$	704.8		$	1,141.1		$	688.6

Property, plant and equipment	Property, plant and equipment
Land								$	46.3		$	46.3
Buildings									1,376.0			1,360.6
Equipment									5,360.5			4,795.5
Construction in progress									739.6			611.1
Software									151.0			140.2

									7,673.4			6,953.7
Less accumulated depreciation and amortization									(3,084.8	)		(2,781.4	)
	Land	$	46.3		$	46.3
	Buildings		1,372.1			1,360.6		$	4,588.6		$	4,172.3
	Equipment		5,230.7			4,851.1
	Construction in progress		666.4			627.4
	Software		209.0			200.7

			7,524.5			7,086.1
	Less accumulated depreciation and amortization		(3,016.0	)		(2,828.5	)

		$	4,508.5		$	4,257.6

As of ~~November 30, 2000,~~March 1, 2001, property, plant and equipment included total costs of ~~$1,034.5~~$1,133.4 million for the Company's semiconductor memory manufacturing facility in Lehi, Utah, of which ~~$575.6~~$611.4 million relates to construction in progress that has not been placed in service and is not being depreciated. Timing for completion of the Lehi facility is dependent upon market conditions, including, but not limited to, worldwide market supply of and demand for semiconductor products and the Company's operations, cash flows and alternative uses of capital. The Company continues to evaluate the carrying value of the facility and as of ~~November 30, 2000,~~March 1, 2001, it was determined there was no impairment.

Depreciation expense was ~~$256.6~~$255.4 million and ~~$213.6~~$505.9 million, respectively, for the second quarter and first six months of 2001, and $220.4 million and $428.1 million for the second quarter and first ~~quarter~~six months of ~~2001 and~~ 2000, respectively.

		November 30, 2000			August 31, 2000
As of								March 1, 2001			August 31, 2000
Accounts payable and accrued expenses	Accounts payable and accrued expenses
	Accounts payable	$	712.1		$	732.5
	Income taxes payable		269.6			288.2
	Salaries, wages and benefits		174.7			236.6
	Taxes payable other than income		49.0			98.5
	Product and process technology payable		21.1			22.8
	Interest payable		4.5			27.6
	Other		49.9			59.6
Accounts payable								$	548.2		$	647.3
Salaries, wages and benefits									105.7			222.3
Taxes payable other than income									32.2			94.8
Income taxes payable									18.1			288.2
Other									35.5			76.2

		$	1,280.9		$	1,465.8		$	739.7		$	1,328.8

Debt	Debt
Convertible subordinated notes payable, due October 2005, with an effective yield to maturity of 8.4%, net of unamortized discount of $56.2 million								$	—		$	683.8
Subordinated notes payable, due October 2005, with an effective yield to maturity of 10.7%, net of unamortized discount of $30.7 million and $33.3 million, respectively									179.3			176.7
Notes payable in periodic installments through July 2015, weighted average interest rate of 7.2% and 7.3%, respectively									74.2			94.5
Capitalized lease obligations payable in monthly installments through August 2004, weighted average interest rate of 7.4% and 7.4%, respectively									19.1			23.2

									272.6			978.2
Less current portion									(42.4	)		(46.8	)
	Convertible subordinated notes payable, due October 2005, with an effective yield to maturity of 8.4%, net of unamortized discount of $56.2 million	$	—		$	683.8
	Subordinated notes payable, due October 2005, with an effective yield to maturity of 10.7%, net of unamortized discount of $32.0 million and $33.3 million, respectively		178.0			176.7		$	230.2		$	931.4
	Notes payable in periodic installments through July 2015, weighted average interest rate of 7.2% and 7.3%, respectively		84.3			94.5
	Capitalized lease obligations payable in monthly installments through August 2004, weighted average interest rate of 9.0% and 7.8%, respectively		30.4			26.6

			292.7			981.6
	Less current portion		(50.2	)		(47.9	)

		$	242.5		$	933.7

The convertible subordinated notes due October 2005 were converted into approximately 24.7 million shares of the Company's common stock on October 10, 2000.

The subordinated notes due October 2005 ~~with a yield to maturity of 10.7%~~ have a face value of $210 million and a stated interest rate of 6.5%.

MEI ~~has a $100 million~~terminated its unsecured credit agreement ~~expiring in June~~effective March 28, 2001. ~~Under the credit agreement, MEI is subject to certain financial and other covenants including certain financial ratios and limitations on the amount of dividends paid by MEI.~~ As of ~~November 30, 2000,~~March 1, 2001, MEI had no borrowings outstanding under the agreement.

Other operating ~~income for the first quarter of 2001 primarily reflects the net pre-tax gain from sales of semiconductor operations equipment. Other operating~~ expense for the second quarter and first ~~quarter~~six months of 2000 ~~primarily reflects the~~includes net pre-tax ~~charge~~losses of $7.1 million and $25.3 million, respectively, from the ~~write-down~~write-downs and ~~disposal~~disposals of semiconductor operations equipment.

Other non-operating income for the first ~~quarter~~six months of 2001 ~~reflects~~includes a ~~gain of~~ $4.5 million gain on ~~the~~MEI's sale of ~~MEI's~~its remaining interest in MCMS, Inc., formerly Micron Custom Manufacturing Services and a wholly owned subsidiary of MEI. Other non-operating income for the first ~~quarter~~six months of 2000 includes a $9.7 million gain on the contribution by MTI of 1.9 million shares of MEI common stock ~~(the "Contribution")~~ to the

~~interest in MEI from approximately 63% to 61%.~~ Selling, general and administrative expense in the first ~~quarter~~six months of 2000 ~~reflects~~includes an $18.7 million charge for the ~~market~~ value of the stock contributed.

The Company's expected effective tax rate for its continuing operations is approximately 35% for 2001, which primarily reflects the ~~first quarter~~statutory corporate income tax rate and the net effect of ~~2001~~state taxation. In addition, the Company's consolidated effective tax rate may vary from period to period due to taxes on earnings or losses of domestic subsidiaries not consolidated for tax purposes and ~~2000 approximated 35%.~~certain foreign operations.

On March 23, 2001, MEI entered into a non-binding letter of intent to sell its PC business to a private technology equity investment firm. The sale of the PC business is expected to take place during the second half of 2001. Summary operating results for the discontinued PC operations follow:

The estimated operating losses during the phase-out period shown in the summary above are the estimated operating losses of the PC business from March 2, 2001, through the anticipated disposal date.

Summarized balance sheet information for the discontinued PC operations is as follows:

Basic earnings per share is calculated using the weighted average number of shares outstanding during the period. Diluted earnings per share incorporates the additional shares issued from the assumed exercise of outstanding stock options using the "treasury stock" method and conversion of convertible debentures using the "if-converted" method, when dilutive. ~~Additional shares~~Diluted earnings per share also incorporates an adjustment to net income to exclude the after-tax effect of interest expense that would have been avoided from the assumed conversion of convertible debentures ~~are excluded from~~which amounted to $3.0 million for the first six months of 2001 and $25.5 million for the first six months of 2000. Net income per diluted earnings per share ~~calculations when~~did not incorporate an adjustment for the assumed conversion of convertible debentures in the second quarter of 2000 because it would be antidilutive.

~~Average employee stock plan~~A reconciliation of the number of common shares ~~of 3.7 million and 1.9 million for November 30, 2000, and December 2, 1999, respectively,~~outstanding follows:

The average shares listed below were not included in the computation of diluted earnings per share because to do so would have been ~~antidilutive.~~antidilutive for the periods presented:

	Quarter ended	Six months ended
	March 1, 2001	March 2, 2000	March 1, 2001	March 2, 2000
Employee stock plans	64.7	3.9	3.8	3.1
8.4% convertible subordinated notes payable due 2005	—	24.7	—	—
7.0% convertible subordinated notes payable due 2004	—	14.8	—	—

MTI participates in two memory manufacturing joint ventures: TECH Semiconductor Singapore Pte. Ltd. ("TECH") and KMT Semiconductor Limited ("KMT"). TECH, which operates in Singapore, is a joint venture between MTI, the Singapore Economic Development Board, Canon Inc. and Hewlett-Packard Company. KMT, which operates in Japan, is a joint venture between MTI and Kobe Steel, Ltd. TECH and KMT are collectively referred to herein as the "JVs." MTI has executed an acquisition agreement to purchase Kobe Steel's 75% equity interest in KMT for $25 million. In conjunction with the acquisition, it is anticipated that MTI will repay, assume or refinance all of KMT's debt, projected to approximate $300 million at closing. Upon closing of the acquisition, expected to occur at the end of April 2001, KMT will become a wholly-owned subsidiary of MTI. The consolidated financial statements do not reflect MTI's proposed transaction with Kobe Steel.

Subject to certain terms and conditions, MTI has agreed to purchase all of the JVs' production. MTI purchases semiconductor memory products from the JVs at prices generally determined quarterly based on a discount from MTI's average selling prices. MTI is a party to various agreements with the JVs whereby MTI provides technology, engineering support and training to assist the JVs in operating advanced wafer fabrication facilities to produce MTI DRAM products. MTI also performs assembly and test services on product manufactured by the JVs. The net cost of products purchased from the JVs, amounting to ~~$205.5~~$115.3 million for KMT and ~~$404.0~~$260.4 million for TECH for the second quarter of 2001 and $257.6 million for KMT and $581.1 million for TECH for the first ~~quarter~~six months of ~~2001 and $113.6~~2001. The net cost of products purchase from the JVs amounted to $147.1 million for KMT and ~~$62.1~~$187.6 million for TECH for the ~~first~~second quarter of 2000 ~~reflects all transactions with~~and $260.7 million and $249.9 million for the ~~JVs.~~

MTI ~~is amortizing~~amortizes the ~~purchase price allocated to~~value of the JV supply arrangements on a straight-line basis over the remaining contractual life of the shareholder agreements. Amortization expense resulting from the JV supply arrangements, included in the cost of product purchased from the JVs, was $2.9 and $5.8 million for the second quarter and first ~~quarter~~six months of 2001 and was $0.6 million and $1.3 million for the second quarter and first ~~quarter~~six months of ~~2000.~~2000, respectively. Receivables from KMT and TECH were ~~$12.1~~$11.4 million and ~~$18.1~~$18.0 million and payables were ~~$73.9~~$89.2 million and ~~$134.3~~$106.1 million, respectively, as of ~~November 30, 2000.~~March 1, 2001. As of August 31, 2000, receivables from KMT and TECH were $12.6 million and $66.8 million and payables were $90.1 million and $89.3 million, respectively.

On October 17, 2000, MTI and Kobe Steel, Ltd. ("Kobe Steel") entered into a non-binding term sheet providing for the purchase by MTI of all of Kobe Steel's equity interest in KMT. The transaction is expected to close in the first half of calendar 2001. In the event the transaction is completed KMT would become a wholly-owned subsidiary of MTI. The Consolidated Financial Statements do not reflect MTI's proposed transaction with Kobe Steel.

The Company's reportable segments have been determined based on the nature of its operations and products offered to customers. The Company's two reportable segments are Semiconductor operations and PCWeb-hosting operations. The Semiconductor operations ~~segment's~~ primary product is DRAM. The PC

Web-hosting operations ~~segment's~~ primary products ~~include desktop and notebook PC systems and network servers. The PC operations segment also reflects the activity of the Company's "e-services" operations, which provide Internet~~are internet access and ~~web hosting~~web-hosting services.

Segment operating results are measured based on operating income (loss). Intersegment sales are accounted for at prices offered to the Company's most favored customers. Intersegment sales primarily reflect sales of memory products from the Semiconductor operations segment to the PC operations segment and, to a lesser extent, sales of computers from the PC operations segment to the Semiconductor operations segment.

Segment assets consist of ~~assets that are identified to reportable segments and reviewed by the chief operating decision-makers. Included in segment assets are~~ cash, investments, accounts receivable, inventory and property, plant and equipment.

								March 1, 2001			August 31, 2000
Segment assets as of	Segment assets as of	November 30, 2000			August 31, 2000
Semiconductor operations	Semiconductor operations	$	8,813.8		$	8,711.4		$	8,172.2		$	8,416.7
PC operations			319.9			379.7
Web-hosting operations									266.3			411.3
All other	All other		14.3			14.6			14.1			14.6

			9,148.0			9,105.7			8,452.6			8,842.6
Elimination of intersegment	Elimination of intersegment		(87.2	)		(97.0	)		(26.3	)		(96.0	)

		$	9,060.8		$	9,008.7		$	8,426.3		$	8,746.6

Reconciliation to total assets:
Reconciliation to total assets
Total segment assets	Total segment assets	$	9,060.8		$	9,008.7		$	8,426.3		$	8,746.6
Prepaid expenses	Prepaid expenses		38.9			22.4			33.9			14.9
Deferred income taxes			188.7			137.1
Deferred taxes									126.0			124.7
Product and process technology	Product and process technology		211.9			213.0			216.6			213.0
Other assets (net of segment assets)	Other assets (net of segment assets)		301.2			250.3			313.9			248.0
Net assets of discontinued PC operations									—			66.4

Total consolidated assets	Total consolidated assets	$	9,801.5		$	9,631.5		$	9,116.7		$	9,413.6

As of ~~November 30, 2000,~~March 1, 2001, the Company had commitments of approximately ~~$1.3~~$1.0 billion for equipment purchases and software infrastructure and ~~$238.2~~$269.3 million for the construction of buildings.

From time to time, others have asserted, and may in the future assert, that the Company's products or its processes infringe their product or process technology rights. In this regard, the Company is currently engaged in litigation with Rambus, Inc. ("Rambus") relating to certain of Rambus' patents. Lawsuits between Rambus and the Company are pending in the United States, Germany, France, the United Kingdom and Italy. The Company is unable to predict the outcome of these suits. A determination that our manufacturing processes or products infringe the product or process rights of others could result in significant liability and/or require the Company to make material changes to ~~our~~its products and/or manufacturing processes. Any of the foregoing results could have a material adverse affect on our business, results of operations or financial condition.

The Company has a number of patent and intellectual property license agreements. Some of these license agreements require us to make one-time or periodic royalty payments. The Company may need to obtain additional patent licenses or renew existing license agreements in the future. The Company is unable to predict whether these license agreements can be obtained or renewed on acceptable terms.

The Company has accrued a liability and charged operations for the estimated costs of settlement or adjudication of asserted and unasserted claims for alleged infringement prior to the balance sheet date. The Company is currently a party to various other legal actions arising out of the normal course of business, none of which is expected to have a material effect on the Company's financial position or results of operations.

On March 23, 2001, MEI entered into a non-binding letter of intent to sell its PC business. (See "Note 6. Discontinued PC operations.")

The Interland Merger has been approved by the Board of Directors of MEI and Interland. The Interland Merger is subject to several conditions and approvals, including shareholder and regulatory approvals. The closing of the Interland Merger is expected to occur in the second half of 2001.

Minority interest for the second quarter and first six months of 2001 and 2000 includes minority shareholders' interest in the SpecTek component recovery business. The component recovery business was transferred from MEI to MTI on April 5, 2001, at which time it became a wholly-owned operation of MTI and, as a result, the Company will no longer record minority interest in the earnings of the component recovery business after April 5, 2001. Approximately $8.0 million and $17.3 million of minority interest is attributable to the earnings of MEI's component recovery business for the second quarter and first six months of 2001, respectively.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Micron Technology, Inc. and its subsidiaries (hereinafter referred to collectively as the "Company") principally design, develop, manufacture and market semiconductor memory ~~products and personal computer ("PC") systems.~~products. Micron Technology, Inc. and its wholly-owned subsidiaries are hereinafter referred to collectively as "MTI." The Company's PCWeb-hosting operations and discontinued personal computer ("PC") operations are operated through Micron Electronics, Inc. ("MEI"), ~~a 61%~~an approximately 60% owned, publicly-traded subsidiary of MTI. (See "Recent Events.")

The following discussion ~~may contain~~contains trend information and other forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements include, but are not limited to, statements made in: "Recent Events" regarding MEI's plans to sell its PC business and merge with Interland, Inc., the estimated losses to be incurred on the disposal of the PC business, MTI's carrying value of its MEI common stock and MTI's estimated loss upon completion of the Interland Merger; "Gross Margin" regarding MTI's pending transaction to purchase Kobe Steel's equity interest in KMT; "Research and Development" regarding the transition to ~~.15µ~~15µ and .13µ line-width process technology; "Income Tax Provision (Benefit)" regarding the tax effect of certain foreign operations and domestic subsidiaries not consolidated for tax purposes; "Recently Issued Accounting Standards" regarding the impact of the implementation of SAB No. 101; and "Liquidity and Capital Resources" regarding capital spending in 2001 and 2002 and MTI's pending transaction to purchase Kobe Steel's equity interest in ~~KMT.~~KMT and the assumption, repayment or refinancing of KMT's debt. The Company's actual results could differ materially from the Company's historical results of continuing operations and those discussed in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, those identified in "Recent Events" and "Certain Factors." This discussion should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended August 31, 2000. All period references are to the Company's fiscal periods ended March 1, 2001, November 30, 2000, ~~December~~March 2, ~~1999,~~2000 or August 31, 2000, unless otherwise indicated. All per share amounts are presented on a diluted basis unless otherwise stated.

On March 23, 2001, MEI announced plans to sell its PC business, merge with Interland, Inc. ("Interland"), a provider of web-hosting services, and transfer its SpecTek component recovery business to MTI. (See "Minority Interest.")

The Company's consolidated results for the second quarter of 2001 include the effects of the planned disposition of MEI's PC business. The Company's consolidated net loss for the second quarter was $88 million (or $0.15 per share), which includes the estimated loss, net of taxes and minority interest, on discontinued PC operations of $84 million ($0.14 per share). The estimated loss of $84 million for the discontinued PC operations consists of estimated losses of $55 million on the disposal of the discontinued PC business and $29 million from the operations of the discontinued PC business in the second quarter of 2001.

The Company's consolidated financial information presents the discontinued PC operations separate from the results of the Company's continuing operations. Historical financial information has been restated to present consistently the discontinued PC operations separate from continuing operations. The discussion and analysis that follows generally focuses on continuing operations.

On March 23, 2001, MEI entered into a non-binding letter of intent to sell the PC business to a private technology equity investment firm. The sale of the PC business is expected to take place during the second half of fiscal 2001. The estimated loss of $55 million on disposal of the discontinued PC business consists of the estimated loss on disposition and estimated operating losses from

March 2, 2001 through the anticipated disposal date. (See "Notes to Consolidated Financial Statements—Discontinued PC operations," and "Certain Factors.")

The results of operations, net assets or liabilities and cash flows for the discontinued PC business have been reported separately as discontinued PC operations in the consolidated financial statements appearing in Item 1 of this Form 10-Q. Net sales from operations of the PC business were $194 million and $455 million for the second quarter and first six months of 2001, respectively, and $233 million and $474 million for the second quarter and first six months of 2000, respectively. The losses from operations of the PC business, net of taxes and minority interest, were $29 million and $36 million for the second quarter and first six months of 2001, respectively, and $8 million and $19 million for the second quarter and first six months of 2000, respectively.

On March 23, 2001, MEI entered into a merger agreement to acquire Interland in a stock-for-stock acquisition (the "Interland Merger") whereby Interland shareholders will own at closing approximately 30% of the combined company. After the merger, MTI's ownership of MEI (approximately 59 million shares) will be reduced from approximately 60% to 40%. As a result, MEI's results will no longer be consolidated in the Company's financial statements, but will be accounted for under the equity method. The Company's carrying value of the MEI common stock is estimated to approximate $200 million on conversion to the equity method of accounting. The net book value of MEI common stock is expected to exceed the fair value of the MEI common stock to be issued in the Interland Merger. As a result, the Company currently estimates it will recognize a loss of approximately $15 million upon consummation of the Interland Merger.

The Interland Merger has been approved by the Boards of Directors of MEI and Interland. The Interland Merger is subject to several conditions and approvals, including shareholder and regulatory approvals. The closing of the Interland Merger is expected to occur in the second half of fiscal 2001.

For the ~~fourth~~first quarter of ~~2000,~~2001, income from continuing operations, net ~~income~~of taxes and minority interest, was ~~$726.7~~$359 million ~~or $1.20~~(or $0.59 per ~~share,~~share) on ~~consolidated~~ net sales of ~~$2,570.2~~$1,572 million.

~~Intersegment sales represent sales between different~~ Net income for the first quarter of 2001 was $352 million (or $0.58 per share). The Company's two reportable segments ~~of the Company and~~ are ~~eliminated to arrive at consolidated net sales. Intersegment sales are primarily comprised of sales from the Company's~~ Semiconductor operations ~~segment to the Company's PC operations segment.~~and Web-hosting operations. (See "Notes

to Consolidated Financial Statements—Operating Segment ~~and Geographic~~ Information.") ~~Unless otherwise stated, all semiconductor production data reflects production of the Company and its joint ventures.~~

~~Consolidated~~Substantially all the Company's net sales from continuing operations for all periods presented were derived from its Semiconductor operations. Net sales from Semiconductor operations for the ~~first~~second quarter of 2001 ~~were higher~~decreased by ~~16%~~9% as compared to the ~~first~~second quarter of ~~2000, primarily due to an increase~~2000. This decrease in net sales ~~from Semiconductor operations.~~

was due to a 53% decrease in average selling prices for the Company's semiconductor memory products substantially offset by a 91% increase in megabits shipped. Net sales from Semiconductor operations for the first ~~quarter~~six months of 2001 increased ~~by 16%~~slightly as compared to the first ~~quarter~~six months of 2000 and decreased by 32% as compared to the fourth quarter of 2000. The increase in net sales from Semiconductor operations for the first quarter of 2001 compared to the first quarter of 2000 was primarily due to a ~~67%~~76% increase in ~~total megabits of semiconductor memory sold,~~megabit shipments partially offset by a ~~31% decline~~41% decrease in average selling prices. The Company achieved higher megabit sales in the first quarter of 2001 as compared to the first quarter of 2000 through increases in total wafer outs, ongoing transitions to successive reduced die size ("shrink") versions of existing memory products and shifts to higher density products. The increase in wafer outs was primarily due to increased capacity utilization of the Company's international and joint venture facilities.

The decrease in net sales from Semiconductor operations for the first quarter of 2001 as compared to the fourth quarter of 2000 was principally due to a 25% decrease in total megabits of semiconductor memory sold and a 9% decline in average selling prices. The decline in net sales and average selling prices in the first quarter was the result of a lower level of sales to PC OEMs who built inventory during the Company's fourth quarter in anticipation of heightened consumer demand which did not fully materialize. Subsequent to the end of the first quarter, industry supply of semiconductor memory has exceeded demand and as a result the Company's inventory levels have continued to grow.

The Company's primary memory product in the second quarter and first ~~quarter~~six months of 2001 was the 128 Meg Synchronous DRAM ("SDRAM"), which ~~constituted~~comprised approximately ~~39%~~47% and 43%, respectively, of the net sales ~~for~~of Semiconductor operations. The 128 Meg SDRAM comprised approximately 6% and 43% of net sales for Semiconductor operations for the first and fourth quarters of 2000, respectively. The 64 Meg SDRAM comprised approximately 18% of net sales for Semiconductor operations in the first quarter of 2001, and 70% and 28% of net sales for Semiconductor operations the first and fourth quarters of 2000, respectively. The Company's primary memory product comprised a smaller percentage of Semiconductor operations net sales for the first quarter of 2001 as compared to the fourth quarter of 2000 because average selling prices for the Company's 128 Meg SDRAM product declined at a faster rate than the average selling prices for many of the Company's other memory products.

Net sales from PCSemiconductor operations ~~for~~decreased by 33% in the first quarter of 2001 were 9% higher compared to the first quarter of 2000 primarily due to a 27% increase in unit sales of the Company's PC systems, partially offset by a 17% decrease in overall average selling prices for PC systems. Average selling prices for desktop systems, which are the PC operations primary product, declined 18% for the firstsecond quarter of 2001 as compared to the first quarter of ~~2000. Desktop~~2001, primarily due to an approximate 50% decrease in the average selling prices of semiconductor memory products. The effect of this decrease in average selling prices was partially offset by a 33% increase in total megabits shipped.

The Company experienced relatively weak demand for its semiconductor memory products during the first six months of 2001. At the same time, increases in total wafer outs and ~~notebook unit sales~~ongoing improvements in manufacturing efficiency contributed to increases in megabit production. As a result, volumes of megabit production increased ~~by 31%~~at a faster pace than shipments of the Company's semiconductor memory products during this period. The aggregate carrying value of the Company's work in progress and ~~9%, respectively, comparing~~finished goods inventories of semiconductor memory products as of the end of the second quarter of 2001 increased approximately 15% and 71% compared to the end of the first quarter of 2001 ~~with~~and the ~~first quarter of 2000. Net sales from PC operations for the first quarter of 2001 were relatively flat as compared to the fourth quarter of 2000.~~prior year end, respectively.

		Second Quarter		Six Months
		2001		% Change		2000		2001		% Change		2000
Gross margin		$	200.3		(58.1	)%	$	478.0		$	962.8		(23.3	)%	$	1,255.8
	as a % of net sales			18.8	%				41.2	%		36.5	%				50.2	%

~~The decrease in overall~~Substantially all of the Company's gross margin from continuing operations for the first quarter of 2001 as compared to the first quarter of 2000 is primarily attributable to a decline in gross margin for Semiconductor operations and, to a lesser extent, to a decline in gross margin for PC operations. The Company's consolidated gross margin percentage for the fourth quarter of 2000all periods presented was ~~53%. The decrease in overall gross margin for the first quarter of 2001 as compared to the fourth quarter of 2000 is primarily attributable to~~derived from its Semiconductor operations.

The gross margin percentage ~~for the Company's~~from Semiconductor operations for the second quarter and first ~~quarter~~six months of 2001 was ~~49%~~18% and 37%, respectively, compared to ~~58%~~41% and 50% for the ~~first quarter~~corresponding periods of 2000. ~~This decrease~~These decreases in gross margin percentage ~~for the Company's Semiconductor operations was~~were due to the ~~31% decrease~~decreases in average selling prices per megabit of memory for the same periods, partially offset by decreases in per megabit manufacturing costs resulting from continued improvements in manufacturing efficiency. Manufacturing cost improvements were achieved principally through ~~transitions to shrink versions~~shifts in the Company's mix of ~~existing~~semiconductor memory products ~~and shifts~~ to higher average density products and ongoing transitions to successive reduced die size ("shrink") versions of existing products.

The gross margin percentage ~~on sales of semiconductor memory products~~ for the ~~fourth~~Semiconductor operations for the first quarter of ~~2000~~2001 was ~~58%~~49%. The decrease in gross margin percentage for ~~semiconductor memory products sold~~the Semiconductor operations in the ~~first~~second quarter

of 2001 as compared to the ~~fourth~~first quarter of ~~2000~~2001 was primarily due to the 9% decrease in average selling prices per megabit of ~~memory, and to a lesser extent, due to increased costs for products purchased from MTI's joint ventures.~~memory.

Subject to specific terms and conditions, MTI has agreed to purchase all of the products manufactured by two joint venture wafer fabrication facilities: TECH Semiconductor Singapore Pte. Ltd. ("TECH") and KMT Semiconductor Limited ("KMT"). TECH and KMT are collectively referred to herein as the "JVs." The JVs supplied in excess of 40% of the total megabits of memory produced by the Company in the second quarter and first ~~quarter~~six months of 2001. MTI purchases semiconductor memory products from the JVs at prices generally determined quarterly and based on a discount from MTI's average selling ~~prices.~~prices of all similar products. MTI provides certain technology, engineering support and training to the JVs. MTI also performs assembly and test services on ~~product~~products manufactured by the JVs. All transactions with the JVs are recognized as part of the net cost of products purchased from the JVs. The Company realized lower gross margins on sales of JV products than for products manufactured by its wholly-owned facilities in the second quarter and first ~~quarter~~six months of 2001 and ~~the first and fourth quarters of~~ 2000.

MTI has ~~pending a transaction~~executed an acquisition agreement to purchase Kobe Steel's 75% equity interest in KMT. InUpon closing of the ~~event~~acquisition, which is expected to occur at the ~~transaction is completed,~~end of April, 2001, KMT ~~would~~will become a wholly-owned subsidiary of MTI. (See "Liquidity and Capital Resources" and "Notes to Consolidated Financial Statements—Joint ~~ventures.~~Ventures.")

The gross margin percentage for PC operations decreased to 11% in the first quarter of 2001 from 14% in the first quarter of 2000, primarily due to an increase in lower margin retail direct and government PC sales. Additionally, the Company continues to experience pricing pressure on its PC systems resulting in the 17% decline in overall average selling prices for PC systems for these comparative periods. The gross margin percentage for PC operations was 12% in the fourth quarter of 2000.

		Second Quarter		Six Months
		2001		% Change		2000		2001		% Change		2000
Selling, general and administrative		$	109.0		16.7	%	$	93.4		$	215.4		9.3	%	$	197.0
	as a % of net sales			10.2	%				8.1	%		8.2	%				7.9	%

Selling, general and administrative expenses ~~decreased~~for continuing operations increased in the second quarter of 2001 compared to the second quarter of 2000 primarily due to increased costs associated with the Company's expanding Web-hosting operations, increased legal costs associated with product and process technology rights litigation and patent prosecution by the Company's Semiconductor operations and increased technical and professional fees associated with the Company's business software systems. (See "Notes to Consolidated Financial Statements—Commitments and contingencies.")

Selling, general and administrative expenses for continuing operations increased in the first ~~quarter~~six months of 2001 as compared to the first ~~quarter~~six months of 2000 primarily due to increased costs associated with the Company's expanding Web-hosting operations. Selling, general and administrative expenses for the Company's Semiconductor operations were flat comparing the first six months of 2001 with the first six months of 2000. Legal fees and technical and professional fees for the Company's Semiconductor operations were higher in the first six months of 2001 as ~~a result~~compared to the first six months of 2000. However, selling, general and administrative expenses for the first six months of 2000 included a $19 million charge in the first quarter of 2000 for the ~~market~~ value of MEI common stock contributed by MTI to the Micron Technology Foundation and a

~~decrease in advertising expense for the Company's PC operations.~~ higher level of bad debt expense. Selling, general and administrative expenses ~~decreased in~~for the second quarter of 2001 were flat compared to the first quarter of ~~2001 as compared~~2001.

Selling, general and administrative expenses for continuing operations attributable to the ~~fourth~~Company's Web-hosting operations approximated 16% of the total for continuing operations for the second quarter and first six months of 2001 and approximated 10% and 7% for the second quarter and first six months of 2000, ~~primarily as a result of lower levels of performance based compensation costs for the Company's Semiconductor operations and lower bad debt expense.~~respectively.

		Second Quarter		Six Months
		2001		% Change		2000		2001		% Change		2000
Research and development		$	130.9		26.7	%	$	103.3		$	269.9		38.6	%	$	194.8
	as a % of net sales			12.3	%				8.9	%		10.2	%				7.8	%

Substantially all the Company's research and development efforts relate to its Semiconductor operations. Research and development expenses vary primarily with ~~personnel costs,~~ the number of development wafers processed, ~~and~~ the cost of advanced equipment dedicated to new product and process ~~development.~~development and personnel costs. The ~~increase~~increases in research and development expenses in the second quarter and first ~~quarter~~six months of 2001 as compared to ~~the first quarter~~corresponding periods of 2000 isare primarily due to an increased number of development wafers processed and higher compensation expenses reflecting an increased number of personnel. Process technology research and development efforts are focused on .15µ and .13µ line-width process technologies, which will enable the Company to transition to next generation products.

Application of advanced process technology currently is concentrated on design of shrink versions of the Company's 128 Meg SDRAMs and on design and development of the Company's Flash, 256 Meg and 512 Meg SDRAMs, DDR SDRAM and SRAM memory products. Other research and development efforts are currently devoted to the design and development of embedded memory, RDRAM, and advanced DRAM technology ("ADT") products. The Company is also developing technology which enables customers to more rapidly adopt the Company's advanced memory architectures such as DDR and ADT.

The Company is transitioning its manufacturing operations to .15µ line-width process technology and expects this transition to continue throughout 2001. The Company anticipates that it will move to .13µ line-width process technology in the next few years as needed for the development of future generation semiconductor products.

Other operating expense for the second quarter and first six months of 2000 includes net pre-tax losses of $7 million and $25 million, respectively, from the write-downs and disposals of semiconductor operations equipment.

Interest income was higher for the second quarter and first six months of 2001 as compared to the second quarter and first six months of 2000 primarily due to the Company's higher levels of cash and liquid investments in 2001 periods.

Interest expense was lower for the second quarter and first six months of 2001 as compared to the second quarter and first six months of 2000, primarily as a result of the Company's conversions of debt to equity in the third quarter of 2000 and the first quarter of ~~2001 primarily reflects~~2001. The Company converted its $500 million, 7.0% convertible subordinated notes to equity in the ~~net pre-tax gain from sales~~third quarter of ~~semiconductor operations equipment. Other operating expense for~~2000 and converted its $740 million face amount, 6.5% convertible subordinated notes to equity in the first quarter of ~~2000 primarily reflects the net pre-tax charge from the write-down and disposal of semiconductor operations equipment.~~2001. (See "Notes to Consolidated Financial Statements—Supplemental balance sheet information—Debt.")

Other non-operating income for the first ~~quarter~~six months of 2001 ~~reflects~~includes a ~~gain of~~ $5 million gain on ~~the~~MEI's sale of ~~MEI's~~its remaining interest in MCMS, Inc., formerly Micron Custom Manufacturing Services and a wholly-owned subsidiary of MEI. Other non-operating income for the first ~~quarter~~six months of 2000 includes a $10 million gain on the contribution by MTI of 1.9 million shares of MEI common stock ~~(the "Contribution")~~ to the

Micron Technology Foundation. ~~The Contribution decreased MTI's ownership interest in MEI from approximately 63% to 61%.~~ Selling, general and administrative expense in the first ~~quarter~~six months of 2000 ~~reflects~~includes a $19 million charge for the ~~market~~ value of the stock contributed.

The Company's expected effective tax rate for its continuing operations is approximately 35% for fiscal 2001, which primarily reflects the ~~first quarter~~statutory corporate income tax rate and the net effect of ~~2001~~state taxation. In addition, the Company's consolidated effective tax rate may vary from period to period due to taxes and ~~2000 approximated 35%. Taxes on~~ earnings or losses of ~~certain foreign operations and~~ domestic subsidiaries not consolidated for income tax ~~purposes may cause~~purposes.

Minority interest for the ~~effective tax rate~~second quarter and first six months of 2001 and 2000 includes minority shareholders' interest in a component recovery business and Web-hosting operation. The component recovery business was transferred from MEI to ~~vary significantly from period~~MTI on April 5, 2001, at which time it became a wholly-owned operation of MTI and, as a result, the Company will no longer record minority interest in the earnings of the component recovery business after April 5, 2001. Approximately $8 million and $17 million of minority interest is attributable to ~~period.~~the earnings of MEI's component recovery business for the second quarter and first six months of 2001, respectively.

SAB No. 101 summarizes certain views of the SEC staff in applying generally accepted accounting principles to revenue recognition in ~~the~~ financial statements. Adoption is required for the Company by the fourth quarter of 2001. The implementation of SAB No. 101 is not expected to have a significant impact on the Company's future results of operations or financial position.

As of ~~November 30, 2000,~~March 1, 2001, the ~~Company~~Company's continuing operations had cash and liquid investments totaling ~~$2.5 billion.~~$2.0 billion, representing a decrease of $417 million from August 31, 2000. The Company's principal source of liquidity during the first ~~three~~six months of 2001 was net cash flow from continuing operations of ~~$617~~$562 million. During the first ~~three~~six months of 2001, the Company ~~made $507~~expended $894 million offor property, plant and equipment ~~expenditures and incurred an increase of $322 million in inventory.~~for continuing operations.

In the first quarter of 2001, the Company's 6.5% convertible subordinated notes due October 2005, with a ~~principal~~face amount ~~outstanding~~ of $740 million, were converted into approximately 24.7 million shares of common stock, resulting in a reclassification of $685 million from debt to equity.

The Company believes that to develop new product and process technologies, support future growth, achieve operating efficiencies and maintain product quality, it must continue to invest in manufacturing technology, facilities and capital equipment, research and development and product and process technology. The Company continuously evaluates the financing of capital improvements ~~including the conversion of some of its operations to 300 millimeter wafer processing,~~ and in this regard has a shelf registration statement in place pursuant to which the Company may from time to time issue debt or equity securities for up to $1 billion. The Company may seek to raise additional funds through issuing debt or equity securities beyond those covered by the existing shelf registration statement. The Company spent approximately ~~$544 million~~$1 billion in the first ~~quarter~~six months of 2001 for purchases of equipment and construction and improvement of buildings and expects capital spending to ~~exceed~~approximate $2 billion for fiscal 2001 and $1 billion in ~~2001.~~the first half of fiscal 2002. As of ~~November 30, 2000,~~March 1, 2001, the Company had commitments extending into fiscal 2003 of approximately ~~$1.3~~$1 billion for equipment purchases and software infrastructure and approximately ~~$238~~$269 million for the construction of facilities.

MTI has ~~pending a transaction~~executed an acquisition agreement to purchase Kobe Steel's 75% equity interest in KMT. In conjunction with the ~~purchase transaction,~~acquisition, it is anticipated that MTI will repay, assume or ~~repay~~refinance all of KMT's debt,

projected to approximate ~~$325~~$300 million at closing. ~~Closing~~The acquisition is expected to ~~occur in~~close at the ~~first half~~end of ~~calendar~~April 2001. ~~There can be no assurance, however, that the pending transaction with Kobe Steel will be consummated.~~

As of ~~November 30, 2000,~~March 1, 2001, approximately ~~$306~~$198 million of the Company's consolidated cash and liquid investments were held by MEI. Cash generated by MEI is not readily available to finance operations or other expenditures of the Company's Semiconductor operations. MEI ~~has a $100 million~~terminated its unsecured credit agreement ~~expiring June 2001, which contains certain restrictive covenants pertaining to MEI, including certain financial ratios and limitations on the amount of dividends declared or paid by MEI.~~effective March 28, 2001. As of ~~November 30, 2000,~~March 1, 2001, MEI had no borrowings outstanding under the agreement.

In addition to the factors discussed elsewhere in this Form 10-Q and in the Company's Form 10-K for the fiscal year ended August 31, 2000, the following are important factors which could cause actual results or events to differ materially from those contained in any forward looking statements made by or on behalf of the Company.

The volatile nature of the DRAM industry could adversely affect our future operating results

The DRAM industry is highly volatile. Due to the commodity nature of DRAM products, when the supply of DRAM products exceeds the demand for such products, average selling prices for DRAM products decline, sometimes rapidly. In the past, our operating results and cash flows have been adversely affected by:

We are dependent on the personal computer ("PC") market as most of the memory products we sell are used in PCs or peripherals. If either the growth rate of PCs sold or the amount of memory included in each PC decreases, sales of our memory products could decrease

We sold most of our memory products to PC or peripheral markets in the second quarter and first ~~quarter~~six months of 2001. DRAMs are the most widely used semiconductor memory ~~component~~components in PCs. ~~The PC market has experienced a slower~~In recent periods the growth rate of ~~growth in recent periods~~PCs sold and ~~industry forecasts indicate that~~ the amount of memory included in each PC ~~will remain relatively stable~~has slowed. Our second quarter results of operations have been affected by these declining growth rates. If we experience a sustained reduction in ~~2001. If~~ either the growth rate of PCs sold or the amount of memory included in each PC, ~~decreases,~~ sales of our memory products could decrease and our results of operations, cash flows and financial condition could be adversely affected.

We have experienced dramatic declines in average selling prices for our memory products which have adversely affected our business

Average per megabit selling prices for our memory products decreased by 9%approximately 50% in the ~~first~~second quarter of 2001 as compared to the ~~fourth~~first quarter of ~~2000~~2001 and have decreased approximately 30% per year on a long-term basis. Further, significant fluctuations in average selling prices for our memory products have occurred, including periods when decreases exceeded ~~the~~30% per year. For instance, we experienced decreases in average selling prices in excess of a long-term 30% rate in four of the last five fiscal years, as ~~shown~~follows: 37% decline in ~~the following chart:~~1999, 60% decline in 1998, 75% decline in 1997 and 46% decline in 1996.

We are unable to predict pricing conditions for any future period. If average selling prices for our memory products decrease faster than we are able to decrease per megabit manufacturing costs, our results of operations, cash flows and financial condition would be adversely affected.

~~Fiscal year to year comparison~~		~~Change in average price per megabit~~
~~2000 to 1999~~		~~3 %~~
~~1999 to 1998~~		~~(37)%~~
~~1998 to 1997~~		~~(60)%~~
~~1997 to 1996~~		~~(75)%~~
~~1996 to 1995~~		~~(46)%~~

Increased worldwide DRAM production could lead to further declines in average selling prices for DRAM

We and our competitors constantly seek to improve yields, reduce die size and use fewer manufacturing steps. These improvements increase worldwide supply of DRAM. In addition, we and several of our competitors are evaluating plans to manufacture semiconductors in facilities that process

300-millimeter ("300mm") wafers as opposed to the current industry standard, 200mm wafers. 300mm wafers have approximately 130% greater usable surface area than 200mm wafers and their widespread use in the industry, which is expected to occur within the next two to five years, will lead to a significant increase in the worldwide supply of DRAM. Increases in worldwide supply of DRAM also result from DRAM capacity expansions, either by way of new facilities, increased capacity utilization, or reallocation of other semiconductor production to DRAM production. We are currently evaluating several capacity expansion programs for our various fabrication facilities. Increases in worldwide supply of DRAM could lead to further declines in average selling prices for our products and adversely affect our results of operations and cash flows.

If any one of our major PC original equipment manufacturer ("OEM") customers significantly reduces its purchases of DRAM from us, our results of operations and cash flows could be adversely affected

We supply several major PC OEMs with more than 30% of their memory requirements. Sales to ~~two~~three of our PC OEM customers approximated ~~20%~~30% of our Semiconductor operation's net sales in the ~~first~~second quarter of 2001. If any one of our major PC OEM customers significantly reduces its purchases of DRAM from us, our results of operations and cash flows could be adversely affected.

If we are unable to make adequate capital investments, our results of operations and cash flows could be adversely affected

To develop new product and process technologies, support future growth, achieve operating efficiencies and maintain product quality, we must invest significant capital in manufacturing technology, facilities and capital equipment, research and development, and product and process technology. We must make substantial capital investments to convert manufacturing operations to 300mm wafer processing over the next several years. We made ~~$544 million~~$1 billion in capital investments in the first ~~quarter~~six months of 2001 and currently estimate that our capital investments will ~~exceed~~approximate $2 billion for fiscal ~~2001.~~2001 and $1 billion in the first half of fiscal 2002. If we are unable to make adequate capital investments, our results of operations and cash flows could be adversely affected.

If we are unable to reduce per megabit manufacturing costs of our memory products at an acceptable rate, our results of operations could be adversely affected

If these efforts are unsuccessful, we may be unable to sufficiently reduce per megabit manufacturing costs and our results of operations and cash flows could be adversely affected.

If our manufacturing process is interrupted, our results of operations and cash flows could be adversely affected

We manufacture products using highly complex processes that require technologically advanced and costly equipment and continuous modification to improve yields and performance. Difficulties in the manufacturing process can reduce yields or interrupt production and affect our ability to deliver products on time or cost-effectively. Additionally, if production at a fabrication facility is interrupted for any reason, including, but not limited to, disruptions in power or water supply, we may be unable to meet demand and customers may purchase products from other suppliers. The resulting loss of revenues and damage to customer relationships could be significant.

~~Our transition to higher bandwidth~~An adverse determination that our products and ~~more diverse product offerings may~~processes infringe the intellectual property rights of others could adversely affect our ~~manufacturing efficiency~~business, results of operation and financial condition

From time to time, others have asserted, and may in the future assert, that our products or our processes infringe their product or process technology rights. In this regard, we are currently engaged in litigation with Rambus, Inc. ("Rambus") relating to certain of Rambus' patents. Lawsuits between Rambus and us are pending in the United States, Germany, France, the United Kingdom and Italy. In this regard, on September 29, 2000, Rambus filed a preliminary proceeding against the Company and EBV (a distributor of the Company's products) in the Civil Court of Monza, Italy, alleging that certain SDRAM and DDR SDRAM products infringe the Italian counterpart to European patent 525 068, and seeking the seizure of certain materials and the entry of a preliminary injunction as to products manufactured at the Company's Avezzano, Italy, site. On October 6, 2000, pursuant to an ex parte proceeding, the Monza court ordered the seizure of certain SDRAM masks used at the Company's Avezzano site. On December 21, 2000, an appeals panel of the Court of Monza ordered that the seizure be revoked and held that the Monza trial court had no jurisdiction to adjudicate the matter. Despite the appeals panel's jurisdictional finding, the Monza trial court has ordered that technical review proceedings continue with respect to the issue of preliminary injunction. The ~~semiconductor memory industry~~Company currently anticipates the technical review process to be completed by May 10, 2001, after which it is ~~currently transitioning~~anticipated that the trial court will enter a ruling. In the event of an adverse ruling, the Company expects to ~~higher bandwidth~~appeal the ruling to the appeals panel of the Court of Monza on the basis that the trial court lacks jurisdiction to adjudicate the matter; however, we are unable to predict the outcome of these suits. Legal proceedings are also pending between the Company and Rambus in the U.S. District Court for the District of Delaware and in other jurisdictions. For more information, see Part II, Other Information, "Item 1. Legal Proceedings." The Company cannot predict the outcome of these suits. A determination that our manufacturing processes or products ~~including Double Data Rate Synchronous DRAM ("DDR SDRAM")~~infringe the product or process rights of others could result in significant liability and/or require us to make material changes to our products and/or manufacturing processes. Any of the foregoing results could have a material adverse affect on our business, results of operations or financial condition.

We have a number of patent and ~~direct Rambus® DRAM ("RDRAM®").~~intellectual property license agreements. Some of these license agreements require us to make one-time or periodic royalty payments. We may ~~have trouble achieving~~need to obtain additional patent licenses or renew existing license agreements in the ~~same manufacturing efficiencies in higher bandwidth products as other memory products. In addition, we have committed~~future. We are unable to ~~make more Flash and SRAM products which may also hinder our manufacturing efficiencies. Our transition to higher bandwidth products and more diverse product offerings may adversely impact our:~~

~~Our transition to higher bandwidth products and more diverse product offerings could increase per megabit production costs and we may not achieve our historical rate of cost per megabit reductions.~~predict whether these license agreements can be obtained or renewed on acceptable terms.

We increased megabit production in recent years through improvement to our manufacturing process, but we may not be able to increase production at the same rate in the future

In recent years, we have increased our megabit production through improvements in our manufacturing processes, including reducing the die size of our existing products. As a result, we have decreased per megabit production costs and significantly increased our megabit production. However, we may not be able to increase megabit production at historical rates in the future. Our ability to increase megabit production in future periods may be limited because of the following factors:

~~An adverse determination that our products and processes infringe the intellectual property rights of others could adversely affect our business, results of operation and financial condition~~

~~From time~~If actual costs to time, others have asserted, and may in the future assert, that our products or our processes infringe their product or process technology rights. In this regard, we are currently engaged in litigation with Rambus, Inc. ("Rambus") relating to certain of Rambus' patents. Lawsuits between Rambus and us are pending in the United States, Germany, France, the United Kingdom and Italy. We are unable to predict the outcome of these suits. A determination that our manufacturing processes or products infringe the product or process rights of others could result in significant liability and/or require us to make material changes to our products and/or manufacturing processes. Anydispose of the ~~foregoing results could have a material adverse affect on~~PC business exceed the estimated costs, our ~~business,~~ results of operations would be adversely affected

The estimated net loss recorded on disposal of the PC business consists of the estimated loss on disposition and estimated operating losses from March 2, 2001, through the anticipated disposal date. These amounts were based upon our expectation that the PC business will be sold. If the contemplated sale does not close or if proceeds from the disposition are less than estimated, our future results of operations would be adversely impacted. In addition, operating losses of the PC business until the date of disposal are based on estimates. If the actual operating losses exceed the estimated operating losses, our results of operations would be adversely impacted.

If MEI is unable to effectively compete in the web-hosting industry or to complete its merger with Interland, our results of operations could be adversely affected

MEI has announced its intent to focus on web-hosting as its business strategy and to exit its non-hosting businesses. The web-hosting industry is highly competitive. A number of MEI's web-hosting competitors have greater brand awareness and market share and have substantially greater financial, ~~condition.~~technical, marketing and other resources than MEI. If MEI is unable to complete its merger with Interland or to effectively compete in the web-hosting industry, our results of operations could be adversely affected. If MEI is unable to dispose of its PC business in a timely manner, MEI may not be able to complete the Interland Merger or to execute its strategy of focusing on the web-hosting business.

If the net book value of MEI stock exceeds its fair market value for a stock transaction or future events determine there is a permanent decline in the value of MEI stock, our results of operations will be adversely impacted

We ~~have~~currently estimate that we will incur a ~~number~~loss of ~~patent and intellectual property license agreements. Some~~approximately $15 million upon consummation of ~~these license agreements require us to make one-time or periodic royalty payments. We~~the Interland Merger. The actual amount of the loss may ~~need to obtain~~vary depending on the net book value at the

~~additional patent licenses~~time of the merger. If the net book value of MEI stock exceeds the fair value of the stock at the time we issue or ~~renew existing license agreements~~sell MEI shares in any transaction, our results of operations will be adversely impacted.

In addition to the anticipated loss upon consummation of the Interland Merger, if future events determine that there is a permanent decline in the ~~future. We are unable~~value of MEI stock, our consolidated financial statements could reflect a charge to ~~predict whether these license agreements can be obtained or renewed on acceptable terms.~~write down our investment in MEI, which investment is currently estimated to approximate $200 million at the time of the Interland Merger, to its fair value.

If we are not able to purchase technologically-advanced semiconductor manufacturing equipment, our results of operations could be harmed

Our Semiconductor operations require highly advanced, complex, and costly semiconductor equipment. If we want to continue to be a low-cost producer of semiconductor memory products, we will need to be able to replace obsolete equipment and purchase the most technologically-advanced semiconductor manufacturing equipment. However, there are only a limited number of suppliers capable of providing this critical equipment. Equipment shortages have occurred from time to time in the past and lead times for ordering new equipment are typically 6 to 18 months. We often need to place orders for new equipment several months in advance to ensure timely delivery, which may limit our ability to alter plans in response to changes in market conditions. Our supply of new equipment could be significantly delayed if any shortages occur. Any equipment delays could limit our ability to use the most cost-effective processes and limit our ability to expand our capacity.

Interruptions in our supply of raw materials could adversely affect our results of operations

Our Semiconductor operations require raw materials that meet exacting standards. We generally have multiple sources of supply for our raw materials, however, only a limited number of suppliers are capable of delivering certain raw materials that meet our standards. Various factors, including increases in worldwide semiconductor manufacturing, could reduce the availability of raw materials such as silicon wafers, photomasks, chemicals, gases, lead frames and molding compound. Raw materials shortages have not interrupted our operations in the past. Nevertheless, shortages may occur from time to time in the future. Also, lead times for the supply of raw materials have been extended in the past. If our supply of raw materials is interrupted or our lead times extended, our results of operations could be adversely affected.

If we are unable to retain existing key employees or hire qualified new employees, our operating results could be adversely affected

We depend on a limited number of key management and technical personnel. Our future success depends in part on our ability to attract and retain highly qualified personnel in our worldwide operations, particularly as we add different product types. Competition for skilled management and technical employees is intense within our industry. Other employers have increased recruitment of our existing personnel.

We face risks associated with our international sales and operations that could adversely affect our operating results

International sales approximated ~~38%~~45% of our consolidated net sales in the second quarter of 2001 and 44% of our consolidated net sales in the first ~~quarter~~six months of 2001. We expect international sales to increase. In addition, we support manufacturing operations in Italy, Singapore, Japan and Scotland. Our international sales and international operations are subject to a variety of risks, including:

These factors may adversely impact our business, results of operations and financial condition.

If average selling prices of memory products decline, we may not be able to generate sufficient cash flow to fund our operations

Historically, we have invested substantially all cash flow from Semiconductor operations in capacity expansion and enhancement programs. Our cash flow from operations depends primarily on average selling prices and per megabit manufacturing costs of our semiconductor memory products. If average selling prices decline at a faster rate than our per megabit manufacturing costs, we may not be able to generate sufficient cash flows to sustain our operations. We may be unable to obtain other external sources of liquidity to fund our operations or efforts to enhance our capacity and product and process technology. Without additional financing, we may be unable to invest sufficiently in capacity expansion and enhancement programs, which could materially adversely affect our business, results of operations and financial condition.

If we fail to compete effectively in the highly competitive semiconductor memory industry, our results of operations and cash flows would be adversely affected

The semiconductor memory industry is highly competitive. We face intense competition from a number of companies, including Hitachi, Ltd., ~~Hyundai Electronics Industries Co., Ltd.~~Hynix Semiconductor, Inc., Infineon Technologies AG., NEC Corporation and Samsung Semiconductor, Inc. Some of these competitors are large corporations or conglomerates that may have greater resources to withstand downturns in the semiconductor memory market, invest in technology and capitalize on growth opportunities. ~~In addition, a number of these competitors have historically been able to introduce new products before we have.~~ Consolidations in the semiconductor memory industry could weaken our position against competitors. If we fail to compete effectively, our results of operations and cash flows would be adversely affected.

Products that do not meet specifications or that contain, or are rumored to contain, defects or that are otherwise incompatible with end uses could impose significant costs on us or otherwise adversely affect our results of operations

Because the design and production process for semiconductor memory is highly complex, it is possible that we may produce products that do not comply with customer specifications, contain defects, or are otherwise incompatible with end uses. If, despite design review, quality control and product qualification procedures, problems with nonconforming, defective or incompatible products occur after we have shipped such products, we could be adversely affected in one or both of the following ways:

If our supply of memory products from our joint ventures is interrupted, our results of operations could be adversely affected

We participate in two joint ventures that currently supply us with in excess of 40% of our total megabits of memory produced. We have agreements to purchase all of the production from the joint ventures subject to specific terms and conditions. The joint ventures have historically ~~required and presently are~~been required to

seek additional financing to fund their ongoing operations and transition to next generation technologies. Our source of supply may be interrupted if either joint venture is unable

to repay or refinance existing debt or obtain required incremental financing. In addition, our supply from each joint venture may be interrupted if either of the joint ~~venture's operations experience~~ventures experiences a disruption in its manufacturing process. Any reduction in supply could adversely affect our results of operations and cash flows.

We have a transaction pending ~~transaction~~ to purchase ~~all of~~ the remaining equity interest in our KMT joint venture. (See "Liquidity and Capital Resources" and "Notes to Consolidated Financial Statements—Joint ~~Ventures.~~ventures.")

~~If our subsidiary, Micron Electronics, Inc., fails to compete effectively in the highly competitive PC and e-services industry, our consolidated results of operations could be adversely affected~~

Our results of operations are affected by, Micron Electronics, Inc. ("MEI"), our 61% owned subsidiary. In 2000, we reduced our ownership in MEI from 63% to 61% through contributions to the Micron Technology Foundation. We anticipate that we will further reduce our ownership share in MEI through contributions to the Foundation. MEI is a publicly traded PC and e-services business. MEI's results of operations, and the resulting effect upon our consolidated results of operations, are linked to conditions in the PC and e-services markets and to MEI's ability to compete effectively in these markets. The PC market has recently experienced reduced growth rates and severe pricing pressure. MEI's success depends on its ability to:

~~If MEI fails to compete effectively in the PC and e-services industry, our consolidated results of operations could be adversely affected.~~

If we are unable to successfully transition our Semiconductor operations to 300mm wafer manufacturing processes, the results of our operations and cash flows could be adversely affected

We have in the past reduced our per megabit manufacturing costs by transitioning to larger wafer sizes. By transitioning to larger wafers, we should be able to produce significantly more die for each wafer at only a slightly higher cost for each wafer, resulting in substantially reduced costs for each die. Several of our competitors have announced intentions to shift part or all of their memory manufacturing operations to 300mm wafers in the near future. Some of these competitors have established pilot 300mm wafer lines. If these competitors are able to transition operations to 300mm wafers before us, we could be at a cost disadvantage. Our transition to 300mm wafer processing will require us to make substantial capital investments, which will depend on our ability to raise funds. We may also experience disruptions in manufacturing operations and reduced yields during our initial transition stage to larger wafer sizes. If we are unable to successfully transition to 300mm wafer processing, our results of operations and cash flows could be harmed.

The DRAM market is expected to undergo considerable market segmentation in the near future. If we fail to accurately predict and meet market demand for various products, the results of our operations and cash flows could be harmed

The DRAM market in the past has been characterized by production of large volumes of one dominant part type with the lowest possible megabit cost. We expect the DRAM market to partially transition its focus from the production of one dominant part type to a market with several different part types based on a variety of new technologies. These new technologies may include PC133 SDRAM, Double Data Rate (DDR) DRAM, and Rambus® DRAM. We also expect to support a larger number of product densities in the future. This segmentation of the DRAM market is expected to continue in future periods, as our memory products are used in a wide variety of different products. If we are to maintain our large market share with major OEM customers we must offer a broader range of products to meet the memory requirements of these OEMs. It takes several months, or even years, to develop and qualify new products. If we are unable to accurately predict the demand for new products or the technologies on which these new products are based, our results of operations and cash flows could be adversely affected given the long lead times associated with product development. In addition, if we are unable to offer a broader range of products in a cost-effective manner, our results of operations and cash flows may be adversely affected.

New technologies could affect demand for our semiconductor memory products and have an adverse affect on our results of operations and cash flows

We and our competitors need to spend substantial resources to develop new semiconductor memory technologies. If our competitors introduce new products and processes before us, demand for our products could decrease and our results of operations could be harmed. We expect our competitors will continue to develop new products and processes in the future. While we will continue to invest substantially in our own research and development efforts, we cannot guarantee that our new products and processes will be competitive.

Substantially all of the Company's liquid investments and long-term debt are at fixed interest rates; therefore, the fair value of these instruments is affected by changes in market interest rates. ~~The~~However, substantially all of the Company's liquid investments mature within one year. As a result, the Company believes that the market risk arising from its holdings of ~~liquid investments~~financial instruments is ~~minimal as substantially all~~minimal. As of March 1, 2001, the ~~Company's investments mature within one year. The carrying value of the Company's long-term debt was $293 million at November 30, 2000, and $1.0 billion at August 31, 2000. The~~ Company held aggregate cash and ~~other assets~~receivables in foreign currency valued at approximately US ~~$74~~$41 million ~~as of November 30, 2000,~~ and ~~US $97 million as of August 31, 2000. The Company also held~~ aggregate foreign currency payables valued at approximately US ~~$112~~$97 million ~~as of November 30, 2000, and US $157 million as of August 31, 2000~~ (including long-term liabilities denominated in Euros valued at approximately US ~~$16 million for both dates)~~$18 million). Foreign currency receivables and payables are comprised primarily of Japanese Yen, British Pounds, ~~Euros~~Singapore Dollars and ~~Singapore Dollars.~~Euros.

On August 28, 2000, the Company filed suit against Rambus, Inc. ("Rambus") in U.S. District Court for the District of Delaware seeking (1) relief under the federal antitrust laws for violations of Section 2 of the ~~Shearman~~Sherman Act; (2) a declaratory ~~judgement~~judgment (a) that certain Rambus patents are not infringed by the Company, are invalid, and/or are unenforceable due to, among other reasons, Rambus' fraudulent conduct in misusing and enforcing those patents, (b) that the Company has an implied license to those patents and (c) that Rambus is estopped from enforcing those patents against the Company, and (3) damages and declaratory relief for Rambus' breach of contract, fraud, deceptive trade practices, negligent misrepresentation, and conduct requiring the application of equitable estoppel. On September 1, 2000, Rambus filed suit against Micron Semiconductor GmbH in the District Court of Mannheim, Germany, alleging that certain SDRAM and DDR SDRAM products infringe German patent and utility model counterparts to European patent 525 068. On September 13, 2000, Rambus filed suit against Micron Europe Limited in the High Court of Justice, Chancery Division in London, England, alleging that certain SDRAM and DDR SDRAM products infringe the U.K. counterpart to European patent 525 068. On September 22, 2000, Rambus filed a complaint against the Company and Reptronic (a distributor of the Company's products) in Court of First Instance of Paris, France, alleging that certain SDRAM and DDR SDRAM products infringe the French counterpart to European patent 525 068. In its suits against the Company, Rambus is seeking monetary damages and injunctive relief. On September 29, 2000, the Company filed suit against Rambus in the Civil Court of Milan, Italy alleging invalidity and non-infringement of the Italian counterpart to European patent 525 068. On September 29, 2000, Rambus filed a preliminary proceeding against the Company and EBV (a distributor of the Company's products) in the Civil Court of Monza, Italy, alleging that certain SDRAM and DDR SDRAM products infringe the Italian counterpart to European patent 525 068, and seeking the seizure of certain materials and the entry of a preliminary ~~injunction.~~injunction as to products manufactured at the Company's Avezzano, Italy, site. On October 6, 2000, pursuant to an ex parte proceeding, the Monza trial court ordered the seizure of certain SDRAM masks used at the Company's Avezzano site. On December 21, 2000, an appeals panel of the Court of Monza ordered that technical the seizure be revoked and held that the Monza trial court had no jurisdiction to adjudicate the matter. Despite the appeals panel's jurisdictional finding, the Monza trial court has ordered that technical review proceedings continue with respect to the issue of preliminary injunction. The Company currently anticipates the technical review process to be completed by May 10, 2001, after which it is anticipated that the trial court will enter a ruling. In the event of an adverse ruling, the Company expects to appeal the ruling to the appeals panel of the Court of Monza on the basis that the trial court lacks jurisdiction to adjudicate the matter. On December 29, 2000, the Company filed suit against Rambus in the Civil Court of Avezzano, Italy, alleging invalidity and non-infringement of the Italian counterpart to European patent 1 004 956. In January, 2001, the Delaware Court ordered the Company's case against Rambus bifurcated to allow a separate trial respecting the Company's claims that Rambus violated the rules of the Joint Electronic Devices Engineering Council ("JEDEC"). Trial on the JEDEC issues is scheduled for May 31, 2001. On February 15, 2001, Rambus filed a counterclaim against the Company alleging infringement of eight Rambus patents subject to the Company's declatory judgement action. Trial on the remaining Company and Rambus claims is presently scheduled to commence on October 29, 2001. The Company is unable to predict the outcome of these suits.

~~The registrant's 2000 Annual Meeting of Shareholders was held on November 28, 2000. At the meeting, the following items were submitted to a vote of the shareholders:~~

(a) The following nominees for Directors were elected. Each person elected as a Director will serve until the next annual meeting of shareholders or until such person's successor is elected and qualified.

For the quarter ended			November 30, 2000			December 2, 1999
Net sales			$	1,832.3		$	1,584.4
Costs and expenses:
	Cost of goods sold			1,041.0			770.7
	Selling, general and administrative			149.6			167.6
	Research and development			139.5			91.7
	Other operating (income) expense, net			(1.8	)		22.4

		Total costs and expenses		1,328.3			1,052.4

Operating income				504.0			532.0
Interest income				44.2			23.2
Interest expense				(10.5	)		(31.7	)
Other non-operating income, net				5.1			9.6

Income before income taxes and minority interests				542.8			533.1
Income tax provision				(189.9	)		(186.2	)
Minority interests in net income				(0.7	)		(5.6	)

Net income			$	352.2		$	341.3

Earnings per share:
	Basic		$	0.61		$	0.63
	Diluted			0.58			0.60
Number of shares used in per share calculations:
	Basic			581.9			538.5
	Diluted			609.4			595.1

For the quarter ended			March 1, 2001			March 2, 2000
Net sales			$	1,065.7		$	1,159.1

Costs and expenses:
	Cost of goods sold			865.4			681.1
	Selling, general and administrative			109.0			93.4
	Research and development			130.9			103.3
	Other operating expense, net			1.4			9.2

		Total costs and expenses		1,106.7			887.0

Operating income (loss)				(41.0	)		272.1
Interest income				43.7			27.9
Interest expense				(4.1	)		(30.6	)
Other non-operating income (loss), net				0.1			(0.2	)

Income (loss) before income taxes and minority interest				(1.3	)		269.2
Income tax (provision) benefit				1.3			(92.9	)
Minority interest in net income				(4.1	)		(7.5	)

Income (loss) from continuing operations				(4.1	)		168.8
Discontinued PC operations, net of taxes and minority interest:
	Loss from operations of PC business			(28.8	)		(7.5	)
	Loss on disposal of PC business			(55.4	)		—

	Net loss from discontinued PC operations			(84.2	)		(7.5	)

Net income (loss)			$	(88.3	)	$	161.3

Basic earnings (loss) per share:
	Continuing operations		$	(0.01	)	$	0.31
	Discontinued PC operations			(0.14	)		(0.01	)

	Total		$	(0.15	)	$	0.30

Diluted earnings (loss) per share:
	Continuing operations		$	(0.01	)	$	0.30
	Discontinued PC operations			(0.14	)		(0.01	)

	Total		$	(0.15	)	$	0.29

Number of shares used in per share calculations:
	Basic			593.8			540.8
	Diluted			593.8			557.2

For the six months ended			March 1, 2001			March 2, 2000
Net sales			$	2,637.3		$	2,502.8

Costs and expenses:
	Cost of goods sold			1,674.5			1,247.0
	Selling, general and administrative			215.4			197.0
	Research and development			269.9			194.8
	Other operating expense (income), net			(1.8	)		32.1

		Total costs and expenses		2,158.0			1,670.9

Operating income				479.3			831.9
Interest income				90.5			51.8
Interest expense				(14.7	)		(62.3	)
Other non-operating income, net				5.2			9.3

Income before income taxes and minority interest				560.3			830.7
Income tax provision				(194.7	)		(288.3	)
Minority interest in net income				(10.2	)		(20.6	)

Income from continuing operations				355.4			521.8
Discontinued PC operations, net of taxes and minority interest:
	Loss from operations of PC business			(36.1	)		(19.2	)
	Loss on disposal of PC business			(55.4	)		—

	Net loss from discontinued PC operations			(91.5	)		(19.2	)

Net income			$	263.9		$	502.6

Basic earnings (loss) per share:
	Continuing operations		$	0.60		$	0.97
	Discontinued PC operations			(0.15	)		(0.04	)

	Total		$	0.45		$	0.93

Diluted earnings (loss) per share:
	Continuing operations		$	0.59		$	0.92
	Discontinued PC operations			(0.15	)		(0.03	)

	Total		$	0.44		$	0.89

Number of shares used in per share calculations:
	Basic			587.9			539.6
	Diluted			609.1			596.0

For the six months ended		March 1, 2001			March 2, 2000
Net income		$	263.9		$	502.6
Unrealized gain (loss) on investments			(0.1	)		39.5

	Total comprehensive income, net of tax	$	263.8		$	542.1

	Quarter ended						Six months ended
	March 1, 2001			March 2, 2000			March 1, 2001			March 2, 2000
Net sales	$	194.5		$	233.4		$	455.2		$	474.1

Loss from operations of PC business	$	(45.3	)	$	(19.2	)	$	(64.1	)	$	(47.7	)
Minority interest		12.6			5.2			18.0			12.7
Income tax benefit		3.9			6.5			10.0			15.8

Loss from operations of PC business, net		(28.8	)		(7.5	)		(36.1	)		(19.2	)

Loss on disposal of PC business		(109.6	)		—			(109.6	)		—
Estimated operating losses during phase-out period		(43.3	)		—			(43.3	)		—
Minority interest		58.2			—			58.2			—
Income tax benefit		39.3			—			39.3			—

Loss on disposal of PC business, net		(55.4	)		—			(55.4	)		—

Loss on discontinued PC operations, net	$	(84.2	)	$	(7.5	)	$	(91.5	)	$	(19.2	)

As of		March 1, 2001			August 31, 2000
Current assets		$	211.7		$	196.7
Property, plant and equipment			79.7			85.4
Other long-term assets			2.9			2.2

	Total assets		294.3			284.3

Current liabilities			(298.4	)		(143.0	)
Long-term liabilities			(20.7	)		(31.8	)

	Total liabilities		(319.1	)		(174.8	)

Minority interest			9.8			(43.1	)

Net assets (liabilities) of discontinued PC operations		$	(15.0	)	$	66.4

For the quarter ended	November 30, 2000		December 2, 1999
Net income available for common shareholders, Basic	$	352.2	$	341.3
Adjustments for effects of assumed conversions		3.1		13.7

Net income available for common shareholders, Diluted	$	355.3	$	355.0

Weighted average common shares outstanding, Basic		581.9		538.5
Adjustments for effects of assumed exercises and conversions		27.5		56.6

Weighted average common shares and share equivalents outstanding, Diluted		609.4		595.1

Basic earnings per share	$	0.61	$	0.63

Diluted earnings per share	$	0.58	$	0.60

For the quarter ended		November 30, 2000			December 2, 1999
Net Sales
Semiconductor operations:
	External	$	1,545.8		$	1,321.9
	Intersegment		12.2			17.6

			1,558.0			1,339.5
PC operations:
	External		286.3			262.4
	Intersegment		1.0			1.2

			287.3			263.6
All other — external			0.1			0.1
Total segments			1,845.4			1,603.2
Elimination of intersegment			(13.1	)		(18.8	)

Total consolidated net sales		$	1,832.3		$	1,584.4

Operating income	November 30, 2000			December 2, 1999
Semiconductor operations	$	538.4		$	564.9
PC operations		(35.4	)		(31.2	)
All other		(0.2	)		(1.8	)

Total segments		502.8			531.9
Elimination of intersegment		1.2			0.1

Total consolidated operating income	$	504.0		$	532.0

		First Quarter
		2001					2000
		(amounts in millions except per share amounts)
Net sales:
	Semiconductor operations	$	1,558.0		85.0	%	$	1,339.5		84.5	%
	PC operations		287.3		15.7	%		263.6		16.6	%
	All other		0.1		0.0	%		0.1		0.0	%
	Intersegment		(13.1	)	(0.7	)%		(18.8	)	(1.1	)%

Consolidated net sales		$	1,832.3		100.0	%	$	1,584.4		100.0	%

Operating income:
	Semiconductor operations	$	538.4				$	564.9
	PC operations		(35.4	)				(31.2	)
	All other		(0.2	)				(1.8	)
	Intersegment		1.2					0.1

Consolidated operating income		$	504.0				$	532.0

Net income		$	352.2				$	341.3

Earnings per share		$	0.58				$	0.60

Name of Nominee	Votes Cast For	Votes Cast Against/Withheld
Steven R. Appleton	496,861,501	5,824,006
James W. Bagley	492,786,082	9,899,425
Robert A. Lothrop	496,762,831	5,922,676
Thomas T. Nicholson	496,827,698	5,857,809
Don J. Simplot	496,799,224	5,886,283
Gordon C. Smith	496,751,194	5,934,313
William P. Weber	496,637,744	6,047,763

		Micron Technology, Inc. (Registrant)

Dated: ~~January 11,~~April 16, 2001		/s/ ~~Wilbur~~WILBUR G. ~~Stover, Jr.~~STOVER, JR. Wilbur G. Stover, Jr., Vice President of Finance and Chief Financial Officer (Principal Financial and Accounting Officer)