Welcome to the wonderful world of Micron Technology, where great quarters are never as great as they seem and hideous quarters aren't as bad. You'd think the sky would fall on memory giant Micron today, since the company missed First Call consensus estimates by a country mile. However, a positive outlook could cushion the blow. The company reported second quarter earnings of 58 cents (35p) a share. Wall Street was hoping for 74 cents (46p) a share. We emphasise the hoping since analysts were targeting everything from 60 cents (37p) a share for earnings to more than $1 (62p) a share. Sure, Micron shares will take a hit, but don't count the dynamic random access memory (RAM) maker out for long. This is the world of commodity technology products where quarterly results are nearly impossible to predict. As we've said before, Micron's business is feast or famine, and the company is currently somewhere in the middle. In the second quarter, it was hit with falling average selling prices, bloated inventory and a slowdown in demand as large customers held off because of Year 2000 worries and the wait for Windows 2000. The second quarter was a major miss, but the third quarter outlook wasn't too shabby. That's why analysts have been upgrading Micron in recent days. The outlook looks good, according to a prediction confirmed by Micron management last night. Here's what went wrong in the second quarter. Sales of $1.4bn (£870m) were down from the first quarter, and average selling prices for the company's semiconductor memory products fell 20 percent sequentially. Overall gross margin decreased to 37 percent in the second quarter from 51 percent in the first. In the first quarter conference call, Micron officials said margins weren't sustainable. Micron's second quarter miss would be a big concern -- if it wasn't so ordinary. The company either tops estimates by a lot or misses by a lot. In the end, the outlook is the only thing that matters. That's why you may not see Micron tank too much today. After a slow start, demand surged in late in the second quarter. "It was a satisfying close to a challenging quarter," said Mike Sadler, vice president of sales and marketing. "We are seeing robust demand." Sadler said sales in January and early February were slow, but picked up as the quarter closed on 2 March and remain strong. That's about as good as it gets in terms of guidance from Micron. Frankly, the company doesn't know what will happen to DRAM prices and supply. And you shouldn't worry about Micron's quarterly movements either -- especially if you're in the stock for the long haul. The company will see strong demand for memory from the communications and wireless sector. PCs are increasingly shipping with tons of memory. Throw in demand from other hot memory-hogging markets, and Micron only looks better. Bear Stearns is expecting memory shortages later this year, and that can only help DRAM prices. Micron has had a nice run, and it should give back some of those gains today. But in a few quarters from now, Micron may look like it was on sale today. Micron is in the commodity game and sometimes it gets ugly. Welcome to Micron's world. Elsewhere in the chip sector, Intel has regained its status as a Wall Street darling, and has brought along the Dow Jones industrial average along for the ride. Intel diversification strategy has Wall Street excited. The company has been gobbling up companies as it grows its communications chip business. PC chips are a nice core business, but the growth is in the communications sector. On Tuesday, Intel bought privately held Basis Communications for about $450m (£279m) in cash and assumed options. A week ago it bought Giga to boost its networking chip line. These two acquisitions follow Intel's purchase of Level One, Dialogic and DSP Communications. Quietly -- a billion here and a billion there -- Intel has created a formidable communications chip unit to take on companies such as Broadcom, among others. On Tuesday, WitSoundview analyst Scott Randall reiterated his "strong buy" rating on Intel and gave the stock a $160 (£99) price target. What do you think? Tell the Mailroom and read what others have to say. See techTrader for more technology investment news, plus quotes and research. See Inter@ctive Investor for US tech investor news.