The memory chip markets are still in a severe downturn. Samsung, a major memory chip manufacturer, expects its operating profit to plunge by 96% year over year in the second quarter. Weak demand for memory chips is the main driver of the decline.

Samsung is now cutting memory chip production, something that it was slow to do early in the downturn, while (NASDAQ: MU) and other manufacturers have been slashing production for multiple quarters. These production cuts are finally having an impact on the supply demand imbalance. While memory chip prices are still declining, the size of those declines is shrinking. That's good news for Micron as the company tries to stem the bleeding as it awaits a better demand environment.

Micron manufactures two types of memory chips: DRAM and NAND. DRAM, which is used in random-access memory in PCs, smartphones, servers, and any other computing device that needs quick access to data as its running, makes up around 70% of Micron's revenue. NAND, used in solid-state drives and flash memory to store data, accounts for most of the rest.

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Source Fool.com