micron fong

8/6/2019 Micron Fong

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Philip Gordon, ISBN 1996Bruce S. Bistline, ISBN 1988GORDON LAW OFFICES623 West Hays StreetBoise, ID 83702

Telephone: 208/345/7100Facsimile: 208/345-0050Attorneys for Plaintiff

[additional counsel appear on signature page]

UNITED STATES DISTRICT COURT

DISTRICT OF IDAHO

Arthur S.K. Fong, On Behalf of Himself andAll Others Similarly Situated,

Plaintiff,

vs.

MICHAEL W. SADLER; WILBUR G.STOVER, JR.; STEVEN R. APPLETON andMICRON TECHNOLOGY, INC.,

Defendants.

No. ___________________

CLASS ACTION

COMPLAINT FOR VIOLATION OF THEFEDERAL SECURITIES LAWS

DEMAND FOR JURY TRIAL

Plaintiff alleges the following based upon the investigation of his counsel, which

included, among other things, a review of the Defendants public documents, conference calls

and announcements, United States Securities and Exchange Commission (SEC) filings, wire

and press releases published by and regarding Micron Technologies, Inc. (Micron or the

Company) securities analysts reports and advisories about the Company, and information

readily obtainable on the Internet.

Case 1:06-cv-00124-WFD Document 1 Filed 03/24/06 Page 1 of 29


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INTRODUCTION

1. This is an action on behalf of purchasers of Micron Technology, Inc. publicly

traded securities during the period from February 24, 2001 to February 13, 2003 (the Class

Period), seeking relief under the Securities Exchange Act of 1934 (the Exchange Act).

2. Micron is a manufacturer and marketer of semiconductor devices throughout the

world. Microns product line includes a series of dynamic random access memory products

(hereinafter DRAM), which provide data storage and retrieval. Micron's products are utilized

in a variety of electronic applications including: personal computers, workstations, network

servers, mobile phones, flash memory cards, USB storage devices, digital still cameras, MP3

players, and other consumer electronics products. These products are offered to original

equipment manufacturers (OEMs) through a network of direct sales forces, independent sales

representatives, distributors, and Microns Web-based customer direct sales division.

3. At the beginning of the Class Period, without the knowledge of investors, Micron

and its employees (along with others in its industry) were engaged in a scheme to manipulate the

price of their computer memory semiconductor chip, DRAM. Throughout 2001, while the

market for personal computers was plummeting, the prices for DRAM and double data rate

DRAM - the type of memory found in the vast majority of personal computers - were soaring. In

fact, some types of DRAM tripled in price in only a few months. Micron and various other

DRAM manufacturers coordinated and engaged in an illegal conspiracy to increase prices by

mutually agreeing to maintain inflated prices.

4. In June of 2002, the U.S. Federal Trade Commission (FTC) charged Rambus

Inc. (Rambus), a Los Altos, California-based company, with violating federal antitrust laws by



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deliberately engaging in a pattern of anticompetitive acts and practices that served to deceive an

industry-wide standard-setting organization resulting in adverse effects on competition and

consumers. Specifically, the FTC charged that Rambus fail[ed] to make required patent

related disclosures, convey[ing] a materially false and misleading impression that Rambus was

not seeking patents related to proposed standards upon which is could later base infringement

claims. The FTC charged that by its silence, while a member of a chip industry standards-

setting body, Rambus, by its silence, tricked the other DRAM makers into including technology

for which it had filed patents for DRAM standards.

5. Once those standards were adopted, Rambus made moves to either collect on

royalties or sue those companies that refused to comply, which included other DRAM industry

companies such as Toshiba, Samsung, Hitachi, NEC, Infineon, Hyundai and Micron. It has

recently come to light that Micron, along with its co-conspirators, engaged in a retaliatory price-

fixing scheme. Each company denied their complicity in the DRAM price-fixing scheme

throughout the Class Period.

6. The U.S. Department of Justice (DOJ) issued a federal grand jury subpoena to

Micron in June of 2002 seeking information concerning pricing and sales of DRAM chips. In

January of 2004, Micron employees plead guilty and admitted to withholding and altering

responsive documents requested by the DOJ.

7. In September 2004, Infineon, a competitor of Micron, admitted to conspiring to

fix DRAM prices. Infineons $160 million fine, one of the largest in the DOJ Antitrust

Divisions history, was the product of a one count charge for violating the Sherman Antitrust Act



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by conspiring with other DRAM manufacturers, between July 1999 and June 2002, to fix prices

on DRAM sold to computer and server vendors.

8. In November 2004, Micron confirmed that it was cooperating with DOJ

investigations into DRAM price fixing charges and that Microns cooperation was given in

return for prosecutorial leniency pursuant to DOJ policy. Following this disclosure, Defendant

Steven R. Appleton (Appleton), Micron's Chairman and Chief Executive Officer, publicly

withdrew his earlier statements that it was not possible to control prices in this industry and

that the DOJs investigation was merely theoretical; admitting that neither [was] the case.

Instead, Appleton conceded that the DOJ's investigation revealed evidence of price fixing by

Micron employees and its competitors on DRAM sold to certain computer and server

manufacturers.

9. During the Class Period, Defendant Micron concealed from the public, by

falsifying public statements and financial reports, the following material information:

a. That Micron and its co-conspirators agreed to, conspired to, and did carry

out a combination and conspiracy in the United States and abroad to fix prices of DRAM, which

were to be sold to certain OEMs, by suppressing and eliminating competition.

b. That the combination and conspiracy agreed to, conspired to, and carried

out by Micron and its co-conspirators constituted an unreasonable restraint of interstate and

foreign trade and commerce in violation of I of the Sherman Act (15 U.S.C. 1).

c. That the combination and conspiracy agreed to, conspired to, and carried

out by Micron, in which it willingly participated, consisted of a continuing agreement,



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understanding, and concert of action among Micron and its co-conspirators, the substantial

terms of which were to agree to fix the prices for DRAM to be sold to certain OEMs.

d. That in furtherance of the combination and conspiracy, Micron and its co-

conspirators undertook those certain actions that they combined and conspired to do, including,

among other things:

(i) actively participating in a variety of communications including

meetings and conversations in the United States and abroad to discuss the prices of DRAM to be

sold to certain OEMs;

(ii) willingly agreeing during those various communications to charge

prices for DRAM at certain levels to be sold to certain OEMs;

(iii) abiding by the agreements by issuing price quotations at the fixed

price level agreed upon;

(iv) sharing, disclosing, and exchanging information on sales of

DRAM to certain OEMs for the purpose of monitoring and enforcing adherence to the agreed-

upon prices; and

(v) artificially inflating the Company's revenue and profits by issuing

misleading statements and reporting false profitability.

e. That Microns publicly-reported sales and earnings had been improperly

inflated due to their involvement, participation, and activity in an illegal price-fixing scheme

during the Class Period.



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f. That as a result of Defendants' willful and active participation in the

illegal price-fixing activities, Micron's sales and earnings reports and forward-looking stock

price forecasts issued during the Class Period were false and misleading.

10. During the Class Period, the Companys shares traded at inflated prices as a result

of Defendants' false and misleading statements, enabling the Company to issue more than $632

million worth of debt, and sell over $480 million worth of warrants and complete numerous

stock-for-stock acquisitions using the Company's inflated shares as acquisition currency. In

addition to these transactions, during the Class Period insiders sold approximately $4.5 million

worth of their own personally held Micron stock at inflated prices.

JURISDICTION AND VENUE

11. The claims asserted herein arise under and pursuant to 10 (b) and 20(a) of the

Exchange Act (15 U.S.C. 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the

SEC (17 C.F.R. 240.10b-5).

12. The Court has jurisdiction over the subject matter of this action pursuant to 28

U.S.C. 1331 and 1337, and 27 of the Exchange Act (15 U.S.C. 78aa).

13. Venue is proper in this District pursuant to 27 of the Exchange Act and 28 U.S.C.

1391 (b). Many of the acts alleged herein occurred and/or are occurring in substantial part in

this District.

14. In connection with the acts alleged in this Complaint, Defendants, directly or

indirectly, used the means and instrumentalities of interstate commerce, including, but not

limited to, the mails, interstate telephone communications and the facilities of the national

securities markets.



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THE PARTIES

15. Plaintiff Arthur S.K. Fong purchased Micron publicly traded securities as detailed

in the attached Certification and was damaged thereby.

16. Defendant Micron engages in the manufacture and marketing of semiconductor

devices throughout the United States and the world. Micron's principal place of business is

located at 8000 S. Federal Way, Boise, Idaho. Micron has approximately 617 million shares of

stock issued and outstanding.

17. Defendant Steven R. Appleton is, and was at all relevant times during the Class

Period, Chairman, President and Chief Executive Officer of Micron.

18. Defendant Michael W. Sadler (Sadler) is, and was at all relevant times during

the Class Period, Micron's Vice President of Worldwide Sales. During the Class Period, Sadler

sold approximately 22,000 shares of Micron stock at inflated prices receiving approximately

$936,000 in proceeds.

19. Defendant Wilbur G. Stover, Jr. (Stover) is, and was at all relevant times during

the Class Period, Chief Financial Officer, Principal Accounting Officer and Vice President of

Finance of Micron. During the Class Period, Stover sold approximately 110,000 shares of

Micron stock at inflated prices receiving approximately $3.6 million in proceeds.

20. Defendants Appleton, Sadler and Stover are referred to hereinafter as the

Individual Defendants. The Individual Defendants, because of their positions within the

Company, possessed the power and authority to control the contents of Microns quarterly

reports, press releases and presentations to securities analysts, money and portfolio managers

and institutional investors, i.e., the market. Each Defendant was provided with copies of the



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Companys reports and press releases alleged herein to be misleading prior to or shortly after

their issuance and had the ability and opportunity to prevent their issuance or cause them to be

corrected. Because of their positions and access to material non-public information available to

them, each of these Defendants knew that the adverse facts specified herein had not been

disclosed to and were being concealed from the public and that the positive representations

which were being made were materially false and misleading. The Individual Defendants are

liable for the false statements pleaded herein, as those statements were each group-published

information, the result of the collective actions of the Individual Defendants.

CLASS ACTION ALLEGATIONS

21. Plaintiff brings this action as a class action pursuant to Rule 23 of the Federal

Rules of Civil Procedure on behalf of all persons who purchased Micron publicly traded

securities on the open market during the Class Period (the Class). Excluded from the Class are

Defendants, directors and officers of Micron and their families and affiliates.

22. The members of the Class are so numerous that joinder of all members is

impracticable. The disposition of their claims in a class action will provide substantial benefits to

the parties and the Court. During the Class Period, Micron had more than 617 million shares

outstanding, owned by thousands of persons.

23. There is a well-defined community of interest in the questions of law and fact

involved in this case. Questions of law and fact common to the members of the Class which

predominate over questions which may affect individual Class members include:



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a. Whether the Exchange Act was violated by Defendants;

b. Whether Defendants omitted and/or misrepresented material facts;

c. Whether Defendants' statements omitted material facts necessary to make

the statements made, in light of the circumstances under which they were made, not misleading;

and

d. Whether Defendants knew or recklessly disregarded that their statements

were false and misleading.

24. Plaintiffs claims are typical of the claims of the other members of the Class.

Plaintiff and all members of the Class purchased Micron securities at artificially inflated prices

established by the actions of Defendants in connection with the acts described herein. Plaintiff

and the members of the Class have all sustained damage in that they paid inflated prices for the

securities at issue due to Defendants conduct in violation of federal law as complained of

herein.

25. Plaintiff will fairly and adequately protect the interests of the member of the Class

and has retained counsel competent and experienced in class action, antitrust and securities

litigation.

26. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as

the damages suffered by individual Class members may be relatively small, the expense and

burden of individual litigation make it impossible for members of the Class to individually

redress the wrongs done to them. There will be no difficulty in the management of this action as

a class action.



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FACTUAL BACKGROUND

27. Prior to and during 1998, the semiconductor business was unstable and prone to

large market swings. During this time the vast majority, over 90%, of semiconductor sales were

for memory chips for personal computers. Seeking market expansion for their business, in 1998,

Appleton expended $800 million of Micron's common stock, a 10% stake at the time, to buyout

Texas Instruments' then money-losing memory unit. This acquisition took place shortly

following one of the periodic downward swings in the DRAM industry market. Following this

activity, Appleton secured additional cash from one of Microns main clients, Intel, who gave

Micron $500 million in exchange for ensuring Intel would have access to the memory chips it

needed for its microprocessors. Microns market share increased from 7%-22% virtually

overnight.

28. In the late 1990s, Rambus was a small firm which claimed to own critical

memory chip bit retrieval technology. Rambus charged Micron and others in the DRAM

industry royalties for use of this technology. Micron and others claimed that these royalty

payments cut deeply into their profits and they accused Rambus of illegally obtaining the

intellectual rights, to the technology at issue. Micron and others argued the rights asserted by

Rambus were improperly derived from Rambus' earlier involvement in an industry standards-

setting group.

29. Micron filed a lawsuit against Rambus on August 28, 2000, alleging violations of

federal antitrust laws, and invalidity, non-infringement and non-enforceability of certain Rambus

patents. Hyundai Electronics (Hyundai) also filed a lawsuit, one day later, seeking a

declaratory judgment that Hundais products did not infringe on certain patents owned by



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Rambus. Rambus responded in September of 2000 by filing patent infringement suits in

Germany and France against Hyundai and Micron. Rambus also requested that the U.S.

International Trade Commission investigate what it deemed unlawful importation of memory

products which Rambus said were covered by its patents. Those lawsuits sought to halt the sale,

manufacture and use of Micron and Hyundai memory devices which Rambus said infringed

upon Rambus European patent.

30. Rambus' aggressive actions had some unintentional consequences. As a result of

their posture, a meaningful network and a coordinated response by others in the DRAM industry

developed. Defendants began conspiring with others in the DRAM industry in an effort to offset

cyclical price declines by agreeing to set DRAM prices -- the major motivation for this action

was to offset the royalty demands made by Rambus, which in times of price and sales decline

had a significant impact on their business.

31. Beginning by at least 1999 and continuing until at least 2002, Defendants, along

with others in the DRAM industry, engaged in a continuing agreement, understanding and

conspiracy in restraint of trade, to artificially raise, fix, maintain or stabilize prices for computer

memory products in the United States in violation of 1 of the Sherman Act, 15 U.S.C. I.

32. The Defendants intentionally agreed to and did fix, raise and maintain, or stabilize

prices for computer memory products in the United States.

33. In developing and bringing the aforesaid contract, combination or conspiracy to

fruition, Micron and its co-conspirators did those things that they combined and conspired to do,

including, among other things:



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a. participated in communication including meetings and conversations in

the United States and abroad to discuss the prices of DRAM to be sold to certain OEMs;

b. agreed, during those communications to charge prices for DRAM at

certain levels to be sold to certain OEMs;

c. issued price quotations in accordance with the agreements reached; and

d. shared, disclosed, and exchanged information on sales of DRAM to

certain OEM customers for the purpose of monitoring and enforcing adherence to the agreed-

upon prices -- and artificially inflating the Company's revenue and profits.

34. Throughout the Class Period, Defendants intentionally, purposefully and

fraudulently concealed this unlawful conduct from Plaintiff and the investing public in violation

of Federal Securities law.

35. Defendants' illegal activities were effective. For the fiscal year ending August 31,

2000, the Company posted a significant earning, reporting $1.5 billion in earnings on sales of

$7.3 billion after two consecutive annual losses. These earning were made in spite of losses

suffered by the personal computer industry.

36. In Microns first quarter of 2001 reporting, made on December 20, 2000, President

and CEO Appleton acknowledged declining DRAM prices and increasing inventory levels, but

in spite of this stated that he was very pleased with the Company's performance, commenting

that [d]espite declining market conditions, Micron had a very strong quarter and added that

Micron was well positioned with leading edge process technology, low-cost manufacturing

expertise and strong financials.



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FALSE AND MISLEADING STATEMENTS

DURING THE CLASS PERIOD

37. Throughout the Class Period, Micron, issued various false and misleading

statements to the public and investors regarding the Companys profitability, including failing to

acknowledge Microns involvement in a price-fixing investigation by the DOJs Antitrust

Division.

38. On March 29, 2001, the Company issued a press release entitled Micron

Technology, Inc. Reports Consolidated Results for Second Quarter of Fiscal 2001. The release

stated in relevant part:

Micron Technology, Inc., today confirmed its March 21, 2001, announcementthat the pretax results of its Semiconductor Operations were slightly profitable forthe second fiscal quarter ended March 1, 2001, on net sales of $1,051 million. TheCompany's consolidated net loss for the second quarter of fiscal 2001 was $88million (or $0.15 per diluted share) which includes the effects of the net loss fromthe Micron Electronics, Inc. (MEI), discontinued PC operations of $84 million (or$0.14 per diluted share) and the net loss from MEI's continuing Web hostingoperation. The Company's consolidated financial information presents the neteffect of discontinued operations separate from the results of the Company'scontinuing operations. Historical financial information of the Company has beenrestated to present consistently the discontinued operations.

The Company's loss from continuing operations, net of taxes, for the secondquarter of fiscal 2001 was $4 million (or $0.01 per diluted share) on consolidatednet sales of $1,066 million. Income from continuing operations, net of taxes, forthe first quarter of fiscal 2001 was $359 million (or $0.59 per diluted share) onnet sales of $1,572 million.

Net sales from the Company's Semiconductor Operations decreasedapproximately 33% in the second quarter of fiscal 2001 compared to theimmediately preceding quarter primarily due to the effect of an approximate 50%decrease in average selling prices for the Company's semiconductor memory products, partially offset by an approximate 33% increase in megabits shipped.Gross margin on sales of semiconductor products decreased to 18% for thesecond quarter of fiscal 2001 from 49% for the first quarter, primarily reflectingthe lower average selling prices for the Company's semiconductor memory



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products. Net sales from the Semiconductor Operations for the first quarter offiscal 2001 were $1.558 million.

39. On June 21, 2001, the Company issued a press release entitled Micron

Technology, Inc., Reports Consolidated Results for Third Fiscal Quarter 2001. The release

stated in part:

Micron Technology, Inc., today announced an after-tax net loss from continuingoperations for the third quarter of $301 million, or $0.50 per diluted share, on$818 million of net sales. The third quarter loss from continuing operationsincludes a pre-tax inventory write down of approximately $260 million. For thefirst nine months of fiscal 2001, the Company reported net income fromcontinuing operations of $54 million, or $0.09 per diluted share, on $3,456million of net sales.

Net sales from the Company's semiconductor operations for the third quarter offiscal 2001 decreased 24% compared to the immediately preceding quarter as aresult of an approximate 35% decline in the Company's overall average selling price per megabit, partially offset by an approximate 20% increase in megabitshipments. The Company's aggregate work in process and finished goodsinventories, as measured in megabits, were considerably higher at the end of thethird quarter, principally due to the acquisition of the KMT wafer fab.

40. On September 25, 2001, the Company issued a press release entitled Micron

Technology. Inc., Reports Consolidated Results for Fourth Quarter and Fiscal Year 2001. The

release stated in part:

Micron Technology, Inc., today announced a net loss for the fourth quarter offiscal 2001 of $576 million, or $0.96 per diluted share, on $480 million of netsales. For the fiscal year ended August 30, 2001, the Company had a net lossfrom continuing operations of $521 million, or $0.88 per diluted share, on $3,936million of net sales. For fiscal year 2000, the Company had net income fromcontinuing operations of $1,548 million, or $2.63 per diluted share, on net sales of$6,362 million.

In the fourth quarter of fiscal 2001, the Company recorded an aggregate charge of$191 million ($118 million, or $0.20 per diluted share, net of taxes) for the write-down of its equity investment in Interland, Inc. (formerly Micron Electronics,Inc.), and subsequent contribution of its Interland shares to the MicronTechnology Foundation. In addition, the loss for the fourth quarter includes the



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effect of a write-down of work in process and finished goods inventories of $466million ($289 million, or $0.48 per diluted share, net of taxes) to reduce thecarrying value of inventories to their lower of cost or market value.

Average selling prices for the Company's semiconductor memory products in the

fourth quarter of fiscal 2001 decreased approximately 55% compared to the thirdquarter and decreased approximately 85% compared to the fourth quarter of theprior year. This precipitous drop in average selling prices led to a 79% drop in theCompany's net sales when comparing the fourth quarter of fiscal 2001 to thefourth quarter of fiscal 2000. The effect of the lower average selling prices on theCompany's net sales for the fourth quarter of fiscal 2001 was partially offset by ahigher level of megabit shipments. Megabit shipments in the fourth quarter offiscal 2001 increased approximately 30% compared to the third quarter andapproximately 45% compared to the fourth quarter of the prior year. TheCompany's megabit shipments for fiscal year 2001 increased approximately 50%compared to fiscal 2000. Megabit inventories in work in process and finished

goods increased slightly in the fourth quarter compared to the third quarter offiscal 2001.

The global economy is facing stiff challenges from which our industry iscertainly not exempt, said Steve Appleton, Micron's Chief Executive Officer.However, Micron is poised with one of the strongest balance sheets in theindustry, an excellent complement of people resources, an industry leading

process technology and a resolve to emerge from these troubled times as the

strongest semiconductor memory manufacturer in the world. Our manufacturingimplementation of 0.13: process technology should position us very positively for

2002.

41. On December 18, 2001, the Company issued a press release entitled Micron

Technology, Inc., Reports Consolidated Results for First Quarter 2002. The release stated in

part:

Micron Technology, Inc., today announced a net loss for the first quarter of fiscal2002 of $266 million, or $0.44 per diluted share, on $424 million of net sales.These results compare to a net loss of $576 million, or $0.96 per diluted share, on$480 million of net sales for the fourth quarter of fiscal 2001 and income fromcontinuing operations of $360 million, or $0.59 per diluted share, on $1,572million of net sales for the first quarter a year ago.

. . . Average selling prices for the Company's semiconductor memory products forthe first quarter of fiscal 2002 decreased 24% when compared to the precedingquarter and decreased 88% when compared to the first quarter a year ago.



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Megabit shipments in the first quarter of fiscal 2002 increased approximately20% compared to the immediately preceding quarter and approximately 130%compared to the first quarter of the prior year. Megabit inventories in work inprocess and finished goods decreased approximately 20% at the end of the firstquarter of fiscal 2002 compared to their levels at the end of the fourth quarter of

fiscal 2001.

42. On March 21, 2002, the Company issued a press release entitled Micron

Technology, Inc., Reports Consolidated Results for the Second Quarter of Fiscal Year 2002.

The release stated in part:

Micron Technology, Inc., today announced a net loss for the second quarter offiscal 2002 of $30 million, or $0.05 per diluted share, on net sales of $646million. These results compare to a net loss of $266 million, or $0.44 per diluted

share, on net sales of $424 million for the first quarter of fiscal 2002 and a netloss from continuing operations of $4 million, or $0.01 per diluted share, on netsales of $ 1.066 million for the second quarter of fiscal 2001.

Net sales in the second quarter of fiscal 2002 were 52% higher compared to thefirst quarter of fiscal 2002 as a result of an approximate 70% increase in averageselling prices for the Company's products, partially offset by an approximate 10%decrease in megabit shipments. The Company's finished goods inventoriesdeclined significantly during the quarter, and reached minimum levels at quarterend. Megabit production in the second quarter of fiscal 2002 was approximately30% lower than the first quarter, attributable to the Company's efforts to reduceits manufacturing cycle times and the effects of scheduled holiday downtime.

43. On June 18, 2002, Micron issued a press release entitled Micron Technology,

Inc. Confirms Industry-Wide Investigation. Therein, the Company, in relevant part, stated:

Micron Technology, Inc., (NYSE:MU) today confirmed that the AntitrustDivision of the Department of Justice has undertaken an industry-wideinvestigation into alleged anticompetitive practices among DRAM manufacturers.Micron confirmed that it received a grand jury subpoena yesterday from theUnited States District Court for the Northern District of California seekinginformation relating to the investigation.

The Company informed the Antitrust Division that it will cooperate fully with theDivisions investigation. Micron does not believe it has violated U.S. antitrustlaws, said Micron VP of Corporate Affairs, Kipp Bedard. The DRAM business



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is highly competitive and subject to extreme volatility. Competitive forces intodays market have led to DRAM prices reaching unprecedented lows.

44. On June 25, 2002, the Company issued a press release entitled Micron

Technology, Inc. Reports Consolidated Results for the Third Quarter of Fiscal Year 2002. The

release stated in part:

Micron Technology, Inc., today announced a net loss for the third quarter of fiscal2002 of $24 million, or $0.04 per diluted share, on net sales of $771 million.These results compare to a net loss of $30 million, or $0.05 per diluted share, onnet sales of $646 million for the second quarter of fiscal 2002 and a net loss fromcontinuing operations of $301 million, or $0.50 per diluted share, on net sales of$818 million for the third quarter of fiscal 2001.

Net sales in the third quarter of fiscal 2002 were 19% higher compared to theimmediately preceding quarter ended February 28, 2002 due to 44% higheraverage selling prices. Although average selling prices were higher for the thirdquarter of fiscal 2002, prices declined from early April through the end of thequarter due to adverse market conditions. Megabits sold by the Company in thethird quarter of fiscal 2002 were 17% lower than in the second quarter, andmegabits of finished goods inventories increased significantly as compared to theend of the second quarter.

45. On September 24, 2002, the Company issued a press release entitled Micron

Technology, Inc., Reports Results for the Fourth Quarter and Fiscal Year 2002. The release

stated in part:

Micron Technology, Inc., today announced results of operations for its fourthquarter and fiscal year ended August 29, 2002, with operating losses of $468million and $ 1,025 million, respectively, on net sales of $748 million and $2,589million, respectively. Operating results for the fourth quarter of fiscal 2002include a write-down of $174 million to record inventories of semiconductorproducts at their estimated market values.

Average selling prices for the Company's semiconductor products decreasedapproximately 30% in the fourth quarter compared to the immediately precedingquarter ended May 30, 2002. The decrease in average selling prices wassubstantially offset by an approximate 40% increase in the Company's megabitshipments during the fourth quarter resulting in only slightly lower net sales forthe fourth quarter compared to the third quarter.



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Despite adverse market conditions, the Company is executing successfully withrespect to its products and technology. In the fourth quarter the Companycompleted its transition from the 256 Meg Sync DRAM to the 256 Meg DDRDRAM as its primary product. Finished goods inventory levels of DDR productsare minimal as demand for DDR memory remains strong.

46. On December 17, 2002, the Company issued a press release entitled Micron

Technology, Inc., Reports Results for the First Quarter of Fiscal Year 2003. The release stated

in part:

Micron Technology, Inc., today announced results of operations for the firstquarter of its 2003 fiscal year which ended November 28, 2002. The Companyrecognized an operating loss for the first quarter of fiscal 2003 of $297 millionand a net loss of $316 million, or $0.52 per diluted share, on sales of $685

million. These results compare to an operating loss of $468 million on sales of$748 million for the immediately preceding quarter and an operating loss of $452million on sales of $424 million for the first quarter of fiscal 2002. Theseoperating results include charges for write-downs of inventories to their estimatedmarket values of $91 million for the first quarter of fiscal 2003, $174 million forthe fourth quarter of fiscal 2002 and $173 million for the first quarter of fiscal2002. Absent the effect of the first quarter of fiscal 2003 write-down and theeffects of previous write-downs of products sold in the first quarter, theCompany's operating loss for the first quarter of fiscal 2003 would have been$345 million.

Average selling prices per megabit for the Company's semiconductor productsdecreased approximately 12% in the first quarter compared to the immediatelypreceding quarter ended August 29, 2002, principally as a result of lower sellingprices for the Company's synchronous DRAM products partially offset by higherselling prices for DDR products. Megabit sales volumes were modestly highercomparing the first quarter to the immediately preceding quarter. SynchronousDRAM products constituted approximately 60% of the first quarter sales asmeasured in megabits, as demand allowed the Company to reduce inventories ofthese devices. The Company's production in the first quarter was slightly morethan 50% DDR memory.

47. Defendants statements described above were materially false and misleading

when made because Defendants failed to disclose the following: (1) that Micron engaged in

illegal anti-competitive behavior to suppress and eliminate competition by fixing the prices of



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DRAM sold to OEMs in violation of 1 of the Sherman Antitrust Act; (2) that Microns

financial results throughout the Class Period were materially inflated as a direct result of the

price-fixing conspiracy due to the Companys illegal behavior of price-fixing; and (3) that the

Companys financial projections during the Class Period lacked a reasonable basis because they

were issued while the Company involved itself in an illegal price-fixing scheme.

48. On November 11, 2004, Micron issued a press release entitled Micron

Technology, Inc. Responds to Recent Article. Therein the Company, in relevant part, stated:

Micron Technology, Inc. today clarified and corrected a recent story about thecompany that appeared in the November 3, 2004, issue of Electronics Weekly

regarding the pending U.S. Department of Justice (DOJ) investigation into pricingin the DRAM industry.

Since the beginning of the investigation, Micron has indicated it is cooperatingfully and actively with the DOJ. Microns cooperation is pursuant to the terms ofthe DOJs Corporate Leniency Policy, which provides that in exchange forMicrons full, continuing and complete cooperation in the pending investigation,Micron will not be subject to prosecution, fines, or other penalties. MicronsChairman, Chief Executive Officer and President Steve Appleton stated,Todays business environment demands broad company awareness andadherence to the principles of good corporate governance and legal compliance.It also requires cooperation with government agencies in investigations ofpossible wrongdoing.

Appleton continued, Although a recent Electronics Weekly article suggested thatI believe it is not possible to control prices in this industry and that the DOJsinvestigation is theoretical, neither is the case. The DOJs investigation revealedevidence of price fixing by Micron employees and its competitors on DRAM soldto certain computer and server manufacturers. Nevertheless, if Micron fullycomplies with the Corporate Leniency Policy, Micron will not be subject tocriminal sanctions or fines, notwithstanding Microns involvement in themisconduct.

Appleton stated further, Micron deplores any effort to fix or stabilize prices andis committed to rectifying past behavior and ensuring any misconduct will notrecur. Micron is dedicated to strong governance practices and comprehensivecompliance programs. These efforts include global programs to ensure ouremployees understand how to interact appropriately with competitors, suppliers



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and customers. Our believe in these principles guides the companys long-standing commitment to strong governance practices and our implementation ofup-to-date, comprehensive compliance programs. Micron continues to cooperatefully and actively with the DOJ in its investigation.

49. The market for Microns securities was open, well-developed and efficient at all

relevant times. As a result of these materially false and misleading statements and failures to

disclose as set forth herein, Microns securities traded at artificially inflated prices during the

Class Period. Plaintiff and other members of the Class purchased or otherwise acquired Micron

securities relying upon the integrity of the market price of Microns securities and market

information relating to Micron, and have been damaged thereby.

50. During the Class Period, Defendants materially misled the investing public,

thereby inflating the price of Microns securities, by publicly issuing false and misleading

statements and omitting to disclose material facts necessary to make Defendants statements, as

set forth herein, not false and misleading. Said statements and omissions were materially false

and misleading in that they failed to disclose material adverse information and misrepresented

the truth about the Company, its business and operations, as alleged herein.

51. At all relevant times, the material misrepresentations and omissions particularized

in this Complaint directly or proximately caused or were a substantial contributing cause of the

damages sustained by Plaintiff and other members of the Class. As described herein, during the

Class Period, Defendants made or caused to be made a series of materially false or misleading

statements about Microns business, prospects and operations. These material misstatements and

omissions had the cause and effect of creating in the market an unrealistically positive

assessment of Micron and its business, prospects and operations, thus causing the Companys

securities to be overvalued and artificially inflated at all relevant times. Defendants materially



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false and misleading statements during the Class Period resulted in Plaintiff and other members

of the Class purchasing the Companys securities at artificially inflated prices, thus causing the

damages complained of herein.

LOSS CAUSATION

52. During the Class Period, as herein alleged, Defendants knowingly and willfully

participated in a concerted ruse to deceive the market that artificially inflated Micron's stock

price by misrepresenting the Companys business success and future business prospects which

resulted in fraud or deceit on Class Period purchasers of Micron stock. Initially Defendants were

successful in carrying out their designed market hoax of purposefully misrepresenting the

Companys business prospects which resulted in short term success, growth and strong future

business prospects. Later, however, when Defendants' veneer of success- made possible by

misrepresentations and fraudulent conduct- was disclosed and became known to the market,

Micron stock fell meteorically as the artificial price inflation came out of Microns stock price.

As a result of their purchases of Micron stock during the Class Period, Plaintiff and other

members of the Class suffered economic loss, i.e., damages, under the federal securities laws.

SCIENTER

53. As alleged herein, Defendants acted with scienter in that Defendants knew that

the public documents and statements issued or disseminated in the name of the Company

pleaded herein were materially false and misleading; knew that such statements or documents

would be issued or disseminated to the investing public; and knowingly and substantially

participated or acquiesced in the issuance or dissemination of such statements or documents as

primary violations of the federal securities laws. As set forth elsewhere herein in detail,



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Defendants, by virtue of their receipt of information reflecting the true facts regarding Micron,

their control over, and/or receipt and/or modification of Micron's allegedly materially misleading

misstatements and/or their associations with the Company which made them privy to

confidential proprietary information concerning Micron, participated in the fraudulent scheme

alleged herein.

54. During the Class Period, and with the Company's stock trading at artificially

inflated prices, Company insiders sold 132,000 shares of Micron stock for gross proceeds of

$4,536,000. Additionally, during the Class Period, the Company issued more than $632 million

worth of debt and sold over $480 million worth of warrants and completed numerous stock-for-

stock acquisitions.

Applicability of Presumption of Reliance:

Fraud-On-The-Market Doctrine

55. At all relevant times, the market for Micron's securities was an efficient market

for the following reasons, among others:

a. Micron's stock met the requirements for listing, and was listed and

actively traded on the NYSE, a highly efficient and automated market;

b. As a regulated issuer, Micron filed periodic public reports with the SEC

and the NYSE;

c. Micron regularly communicated with public investors via established

market communication mechanisms, including through regular disseminations of press releases

on the national circuits of major newswire services and through other wide-ranging public

disclosures, such as communications with the financial press and other similar reporting

services; and



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d. Micron was followed by several securities analysts employed by major

brokerage firms who wrote reports which were distributed to the sales force and certain

customers of their respective brokerage firms. Each of these reports was publicly available and

entered the public marketplace.

56. As a result of the foregoing, the market for Micron's securities promptly digested

current information regarding Micron from all publicly available sources and reflected such

information in Micron's stock price. Under these circumstances, all purchasers of Micron's

securities during the Class Period suffered similar injury through their purchase of Micron's

securities at artificially inflated prices and a presumption of reliance applies.

NO SAFE HARBOR

57. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

Many of the specific statements pleaded herein were not identified as "forward-looking

statements" when made. To the extent there were any forward-looking statements, there were no

meaningful cautionary statements identifying important factors that could cause actual results to

differ materially from those in the purportedly forward-looking statements. Alternatively, to the

extent that the statutory safe harbor does apply to any forward- looking statements pleaded

herein, Defendants are liable for those false forward-looking statements because at the time each

of those forward-looking statements was made, the particular speaker knew that the particular

forward-looking statement was false, and/or the forward-looking statement was authorized



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and/or approved by an executive officer of Micron who knew that those statements were false

when made.

FIRST CLAIM FOR RELIEF

For Violation of 10(b) of the Exchange Act

and Rule 10b-5 Against All Defendants

58. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.

59. During the Class Period, Defendants disseminated or approved the false

statements specified above, which they knew to be, or recklessly disregarded as, materially false

and misleading as those statements contained material misrepresentations and Defendants failed

to disclose material facts necessary to make the statements made not misleading.

60. Defendants violated 10(b) of the Exchange Act and Rule 10b-5 in that they:

a. Employed devices, schemes, and artifices to defraud;

b. Made untrue statements of material facts or omitted to state material facts

necessary in order to make statements made, in light of the circumstances under which they were

made not misleading; or

c. Engaged in acts, practices, and a course of conduct that operated as a

fraud or deceit upon Plaintiff and others similarly situated in connection with their purchases of

Micron publicly traded securities during the Class Period.

61. These Defendants employed devices, schemes and artifices to defraud, while in

possession of material adverse non-public information and engaged in acts, practices, and a

course of conduct as alleged herein in an effort to assure investors of Micron's value and



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or indirectly on the false and misleading statements made by Defendants, or upon the integrity of

the market in which the securities trade, and/or on the absence of material adverse information

that was known to or recklessly disregarded by Defendants but not disclosed in public statements

by Defendants during the Class Period, Plaintiff and the other members of the Class acquired

Micron securities during the Class Period at artificially high prices and were damaged thereby.

64. At the time of said misrepresentations and omissions, Plaintiff and other members

of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff and the

other members of the Class and the marketplace known the truth regarding Micron's financial

results, which were not disclosed by Defendants, Plaintiff and other members of the Class would

not have purchased or otherwise acquired their Micron securities, or, if they had acquired such

securities during the Class Period, they would not have done so at the artificially inflated prices

which they paid.

65. By virtue of the foregoing, Defendants have violated Section 10(b) of the

Exchange Act, and Rule 10b-5 promulgated thereunder.

66. As a direct and proximate result of Defendants' wrongful conduct, Plaintiff and

the other members of the Class suffered damages in connection with their purchases and sales of

the Company's securities during the Class Period.

SECOND CLAIM FOR RELIEF

For Violation of 20(a) of the Exchange Act

Against All Individual Defendants

67. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.



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68. Each of the Individual Defendants primary liability, and controlling person

liability, arises from the following facts: (i) the Individual Defendants were high-level

executives and/or directors at the Company during the Class Period and members of the

Companys management team or had control thereof; (ii) each of these Defendants, by virtue of

his responsibilities and activities as a senior officer and/or director of the Company was privy to

and participated in the creation, development and reporting of the Companys internal budgets,

plans, projections and/or reports; (iii) each of these Defendants enjoyed significant personal

contact and familiarity with the other Defendants and was advised of and had access to other

members of the Companys management team, internal reports and other data and information

about the Companys finances, operations, and sales at all relevant times; and (iv) each of these

Defendants was aware of the Companys dissemination of information to the investing public

which they knew or recklessly disregarded was materially false and misleading.

69. The Individual Defendants acted as controlling persons of Micron within the

meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level

positions, and their ownership and contractual rights, participation in and/or awareness of the

Company's operations and/or intimate knowledge of the false financial statements filed by the

Company with the SEC and disseminated to the investing public, the Individual Defendants had

the power to influence and control and did influence and control, directly or indirectly, the

decision-making of the Company, including the content and dissemination of the various

statements which Plaintiff contends are false and misleading. The Individual Defendants were

provided with or had unlimited access to copies of the Company's reports, press releases, public

filings and other statements alleged by Plaintiff to be misleading prior to and/or shortly after



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these statements were issued and had the ability to prevent the issuance of the statements or

cause the statements to be corrected.

70. In particular, each of these Defendants had direct and supervisory involvement in

the day-to-day operations of the Company and, therefore, is presumed to have had the power to

control or influence the particular transactions giving rise to the securities violations as alleged

herein, and exercised the same.

71. As set forth above, Micron and the Individual Defendants each violated Section

10(b) and Rule 10b-5 by their acts and omissions as alleged in this Complaint. By virtue of their

positions as controlling persons, the Individual Defendants are liable pursuant to Section 20(a) of

the Exchange Act. As a direct and proximate result of Defendants' wrongful conduct, Plaintiff

and other members of the Class suffered damages in connection with their purchases of the

Company's securities during the Class Period.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for judgment as follows:

1. declaring this action to be a proper class action;

2. awarding damages, including interest, to the Plaintiff and the members of the

class;

3. awarding reasonable costs, including attorneys' fees, to the Plaintiff and the

members of the class; and

4. for such equitable, injunctive or other relief as the Court may deem proper.



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JURY DEMAND

Plaintiff demands a trial by jury.

Dated: March 24, 2006 GORDON LAW OFFICES

By: /s/Philip Gordon, ISBN 1996

Bruce S. Bistline, ISBN 1988623 West Hays StreetBoise, ID 83702Tel: (208) 345/7100Fax: (208) 345-0050

Richard A. LockridgeKaren H. RiebelLOCKRIDGE GRINDAL NAUEN P.L.L.P.100 Washington Avenue South, Suite 2200Minneapolis, MN 55401Tel: (612) 339-6900Fax: (612) 339-0981

James T. Capretz

CAPRETZ & ASSOCIATES5000 Birch Street, Suite 2500Newport Beach, CA 92660-2139Tel: (949) 724-3000Fax: (949) 757-2635

Diane NygaardNYGAARD LAW FIRM, P.A.Two Emanuel Cleaver II Blvd., Suite 150Kansas City, MO 64112Tel: (913) 469-5544

Fax: (913) 469-9370

Attorneys for Plaintiff


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