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District Of Idaho Grants Motion To Dismiss Securities Class Action Against Semiconductor Manufacturing Company
02/10/2026On February 3, 2026, Judge B. Lynn Winmill of the United States District Court for the District of Idaho granted a motion to dismiss a putative securities class fraud action asserting claims against a semiconductor company (the “Company”), and its CEO and CFO, under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. In re Micron Technology Inc. Securities Litigation, No. 1:25-cv-00191-BLW (D. Idaho Feb. 3, 2026). In granting defendants’ motion to dismiss, the Court held that the amended complaint did not adequately plead falsity or scienter.
Plaintiffs are investors who allegedly purchased the Company’s stock between March 29, 2023, and December 18, 2024 (the putative “Class Period”). According to plaintiffs, in the year leading up to the Class Period, the semiconductor chip industry experienced a downturn which affected sales of the Company’s DRAM and NAND chips, and caused the Company’s revenue to drop and inventories to increase. However, by the start of the Class Period, the Company allegedly began predicting a gradual recovery in its supply-demand balance, issuing increasingly optimistic statements over the next year. While the Company experienced growth during this time and increased DRAM sales, sales of NAND products slowed at the end of the period. On December 18, 2025, citing the drop in NAND demand, the Company issued reduced earnings guidance which allegedly caused the stock price to drop. Plaintiffs alleged that, throughout the Class Period, defendants falsely overstated global supply-and-demand dynamics for the Company’s microchips, at the same time that the CEO allegedly entered a plan to sell a large amount of his Company stock. Plaintiffs identified 32 alleged material misrepresentations throughout the Class Period regarding relevant market conditions and the Company’s revenue growth and forecasts.
In granting defendants’ motion to dismiss, the Court first addressed the issue of scienter, which plaintiffs alleged based on (1) the CEO’s alleged stock sale, (2) a confidential witness’s alleged statements about the Company’s detailed and rigorous process for forecasting demand, and (3) Plaintiffs’ retained expert’s analysis of the Company’s inventory levels and ratios. The Court held that the amended complaint failed to support an inference of scienter based on the CEO’s alleged stock sales because the CEO sold less than half of his holdings, at a time when the Company’s stock price was lower than the price following the December guidance, and because no other insiders made similar sales. The Court also held that the alleged statements by the confidential witness fell short of establishing scienter because, while the confidential witness attested as to the Company’s general practices, that account did not indicate that defendants knew of the eventual downturn in NAND sales or otherwise acted with deliberate recklessness in issuing growth forecasts prior to that. Finally, the Court held that plaintiffs’ expert’s analysis did not support scienter because the expert did not have any relevant personal knowledge and based his opinions on SEC filings, and the amended complaint did not provide any information about his methodology.
Because the absence of scienter provided “such a clear basis for dismissal,” the Court conducted a “fairly brief” analysis of falsity. Plaintiffs alleged that defendants falsely predicted market recovery, but the Court held that the fact that the Company’s December disclosures were weaker than what investors anticipated, due to the drop in demand for NAND sales, did not render defendants’ alleged statements misleading. In addition, the Court observed that the Company did in fact report record revenue and increased overall demand for its product, notwithstanding the decline in NAND product sales at the end of the Class Period as compared to the increase in DRAM sales. Moreover, the Court held that many of the alleged misrepresentations—such as “[w]e believe that [the product] will grow to a new record in calendar 2025 and will continue to outpace the growth of the semiconductor industry thereafter”—were forward-looking statements that are protected by the PSLRA’s Safe Harbor, or otherwise constituted inactionable corporate puffery.
Having found that plaintiffs failed to adequately plead an underlying Section 10(b) claim, the Court dismissed plaintiffs’ control person liability claims under Section 20(a). The Court granted leave for plaintiffs to file a second amended complaint within 30 days of the order.
