SECURITIES AND EXCHANGE COMMISSION
                          Washington, D. C. 20549


                                 FORM 10-Q



     (Mark One)
     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

     For the quarterly period ended                   December 3, 1998
                                   ---------------------------------------------
                                    OR

     [   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

     For the transition period from                        to
                                   ------------------------  -------------------
     Commission File Number:                          0-17932
                            ----------------------------------------------------


                          Micron Electronics, Inc.
          ------------------------------------------------------
          (Exact name of registrant as specified in its charter)





          Minnesota                                            41-1404301
----------------------------------                      ------------------------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                            Identification No.)


900 E. Karcher Road,  Nampa, Idaho                                      83687
--------------------------------------------------------------------------------
(Address of principal executive offices)                           (Zip Code)


     Registrant's telephone number, including area code  (208) 898-3434
                                                       -------------------------

  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 as of
December 30, 1998 was 96,061,036.
<PAGE>

                      PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements
-----------------------------

Micron Electronics, Inc.
Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)

<TABLE>
<CAPTION>
Fiscal quarter ended                        December 3, 1998   November 27, 1997
--------------------------------------------------------------------------------
<S>                                                <C>                 <C>
Net sales                                          $ 403,496           $ 558,890
Cost of goods sold                                   334,678             481,676
                                                   ---------           ---------
Gross margin                                          68,818              77,214
Selling, general and administrative                   52,396              72,258
Research and development                               1,451               3,582
Other expense, net                                        40               1,807
                                                   ---------           ---------
Operating income (loss)                               14,931               (433)
Interest income, net                                   4,027               2,194
                                                   ---------           ---------
Income before taxes                                   18,958               1,761
Income tax provision                                   7,299                 696
                                                   ---------           ---------
Net income                                         $  11,659           $   1,065
                                                   =========           =========

Earnings per share:
  Basic                                            $    0.12           $    0.01
  Diluted                                               0.12                0.01

Number of shares used in per share calculation:
  Basic                                               95,953              95,552
  Diluted                                             97,316              95,923
</TABLE>

The accompanying notes are an integral part of the financial statements.
<PAGE>                           <1>
Micron Electronics, Inc.
Consolidated Balance Sheets
(Amounts in thousands, except par value amounts)

<TABLE>
<CAPTION>
As of                                        December 3, 1998  September 3, 1998
--------------------------------------------------------------------------------
<S>                                                  <C>                <C>
ASSETS
Cash and cash equivalents                            $313,784           $328,537
Liquid investments                                     55,915             29,204
Receivables, net                                      166,722            128,269
Inventories                                            29,581             30,848
Deferred income taxes                                  22,380             19,172
Other current assets                                    2,451              2,432
                                                     --------           --------
  Total current assets                                590,833            538,462

Property, plant and equipment, net                    149,752            147,912
Other assets                                            3,463              6,069
                                                      -------           --------
  Total assets                                       $744,048           $692,443
                                                     ========           ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses                $237,187           $214,930
Accrued licenses and royalties                         30,685             18,585
Current debt                                           18,015             16,798
                                                     --------           --------
  Total current liabilities                           285,887            250,313

Long-term debt                                          9,777             11,730
Other liabilities                                      17,129             13,506
                                                     --------           --------
  Total liabilities                                   312,793            275,549
                                                     --------           --------
Commitments and contingencies

Common stock, $.01 par value, authorized 150.0
  million shares; issued and outstanding 96.1
  million and 95.9 million shares at December 3,
  1998 and September 3, 1998, respectively                961                959
Additional capital                                    125,888            122,837
Retained earnings                                     304,719            293,061
Accumulated other comprehensive income (loss)           (313)                 37
                                                     --------           --------
  Total shareholders' equity                          431,255            416,894
                                                     --------           --------
  Total liabilities and shareholders' equity         $744,048           $692,443
                                                     ========           ========
</TABLE>


The accompanying notes are an integral part of the financial statements.
<PAGE>                           <2>

Micron Electronics, Inc.
Consolidated Statements of Cash Flows
(Amounts in thousand)
<TABLE>
<CAPTION>
Fiscal quarter ended                        December 3, 1998   November 27, 1997
--------------------------------------------------------------------------------
<S>                                                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                         $  11,659           $   1,065
Adjustments to reconcile net income to net
  cash provided by (used for) operating
  activities:
     Depreciation and amortization                     7,894              10,413
     Changes in assets and liabilities:
       Receivables                                  (38,167)            (33,697)
       Inventories                                     1,520            (15,152)
       Accounts payable and accrued expenses          25,220              33,448
       Accrued licenses and royalties                 12,100             (3,523)
       Deferred income taxes                           3,038               1,743
       Other                                             399               1,419
                                                   ---------           ---------
Net cash provided by (used for) operating
  activities                                          23,663             (4,284)
                                                   ---------           ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment      (12,987)            (25,931)
Proceeds from sales of property, plant and
equipment                                                  -               5,798
Purchases of held-to-maturity investment securities (42,613)                   -
Proceeds from maturities of investment securities     16,125                   -
Other                                                  (262)               (528)
                                                   ---------           ---------
Net cash used for investing activities              (39,737)            (20,661)
                                                   ---------           ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings                                   -                   3
Repayments of debt                                   (1,823)             (1,877)
Proceeds from issuance of common stock                 2,772                  39
Purchase and retirement of stock                           -                (21)
                                                   ---------           ---------
Net cash provided by (used for) financing
activities                                               949             (1,856)
                                                   ---------           ---------
Net decrease in cash and cash equivalents           (15,125)            (26,801)
Effect of exchange rate changes on cash and cash
equivalents                                              372                   -
Cash and cash equivalents at beginning of period     328,537             183,935
                                                   ---------           ---------
Cash and cash equivalents at end of period         $ 313,784           $ 157,134
                                                   =========           =========
</TABLE>


The accompanying notes are an integral part of the financial statements.
<PAGE>                           <3>

Micron Electronics, Inc.
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except per share amounts)


1. Unaudited Interim Financial Statements

   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 financial position
of Micron Electronics, Inc. and its subsidiaries (collectively, the
"Company") and their results of operations and cash flows.  Certain
reclassifications have been made, none of which affect results of
operations, to present the financial statements on a consistent basis.

   This report on Form 10-Q for the first fiscal quarter ended December 3,
1998 should be read in conjunction with the Company's  Annual Report on
Form 10-K for the fiscal year ended September 3, 1998.  Portions of the
accompanying financial statements are derived from the audited year-end
financial statements of the Company dated September 3, 1998.  The Company's
fiscal year is a 52 or 53 week period ending on the Thursday closest to
August 31.

   The Company adopted Statement of Position ("SOP") 98-1, "Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use" as
of the first quarter of fiscal 1999.  SOP 98-1 requires companies to
capitalize certain costs of computer software developed or obtained for
internal use, provided that those costs are not research and development.
The adoption did not have a material effect on the Company's results of
operations or financial position for the quarter ended December 3, 1998.

<TABLE>
<CAPTION>
2.   Receivables
                                            December 3, 1998   September 3, 1998
--------------------------------------------------------------------------------
<S>                                                 <C>                 <C>
Trade receivables                                   $160,221            $122,294
Receivables from affiliates, net                         344                 105
Income taxes recoverable from MTI                      3,544               3,068
Other                                                  9,271              10,090
Allowance for doubtful accounts                      (3,455)             (3,709)
Allowance for returns and discounts                  (3,203)             (3,579)
                                                    --------            --------
                                                    $166,722            $128,269
                                                    ========            ========
</TABLE>

3.   Inventories
<TABLE>
<CAPTION>
                                           December 3, 1998   September 3, 1998
--------------------------------------------------------------------------------
<S>                                                 <C>                 <C>
Raw materials and supplies                          $ 15,282            $ 16,144
Work in progress                                       5,422               4,469
Finished goods                                         8,877              10,235
                                                    --------            --------
                                                    $ 29,581            $ 30,848
                                                    ========            ========
</TABLE>
<PAGE>                           <4>

Micron Electronics, Inc.
Notes to Consolidated Financial Statements - Continued
(Tabular amounts in thousands, except per share amounts)


4.   Property, Plant and Equipment
<TABLE>
<CAPTION>
                                            December 3, 1998   September 3, 1998
--------------------------------------------------------------------------------
<S>                                                 <C>                 <C>
Land                                                $  1,234            $  1,234
Buildings                                             35,200              34,826
Equipment and software                               156,136             145,310
Assets in progress                                    36,151              38,197
                                                    --------            --------
                                                     228,721             219,567
Less accumulated depreciation and amortization      (78,969)            (71,655)
                                                    --------            --------
                                                    $149,752            $147,912
                                                    ========            ========
</TABLE>

   Effective September 4, 1998, the Company revised its estimated useful
lives of certain information technology assets.  The effect of this change
was to reduce the first fiscal quarter 1999 depreciation and amortization
charge by $1.4 million ($0.8 million net of tax), or $0.01 per diluted
share.

5.   Accounts Payable and Accrued Expenses
<TABLE>
<CAPTION>
                                            December 3, 1998   September 3, 1998
--------------------------------------------------------------------------------
<S>                                                 <C>                 <C>
Trade accounts payable                              $170,511            $146,124
Payable to affiliates                                 27,215              20,601
Salaries, wages and benefits                          15,142              20,496
Income taxes payable                                     278                  92
Equipment contracts payable                              636               3,884
Accrued warranty                                      17,699              17,128
Other                                                  5,706               6,605
                                                    --------            --------
                                                    $237,187            $214,930
                                                    ========            ========
</TABLE>

6.   Debt
<TABLE>
<CAPTION>
                                            December 3, 1998   September 3, 1998
--------------------------------------------------------------------------------
<S>                                                  <C>                <C>
Notes payable in periodic installments
  through September 2001,weighted average
  interest rate of 7.62% and 7.63%, respectively     $ 14,985           $ 16,068
Capitalized lease obligations payable in monthly
  installments through June 2000, interest rate
  of 7.28%                                              3,544              4,284
Amounts outstanding under revolving loan agreement,
  due June 1999, variable interest of 1.52% and
  1.34%, respectively                                   9,263              8,176
                                                     --------           --------
                                                       27,792             28,528
Less current portion                                 (18,015)           (16,798)
                                                     --------           --------
                                                     $  9,777           $ 11,730
                                                     ========           ========

</TABLE>

  The Company has an unsecured credit agreement, expiring June 2001, with a
group of financial institutions providing for borrowings totaling $100.0
million.  As of December 3, 1998, the Company was eligible to borrow the
full amount under the agreement, but had no borrowings outstanding.  Under
the agreement, the Company is subject to certain financial and other
covenants including certain financial ratios and limitations on the amount
of dividends declared or paid by the Company.
<PAGE>                           <5>

Micron Electronics, Inc.
Notes to Consolidated Financial Statements-Continued
(Tabular amounts in thousands, except per share amounts)


  The Company's wholly-owned subsidiary, Micron Electronics Japan K.K., has
an unsecured revolving credit facility with a financial institution,
expiring June 1999, providing for borrowings of up to 1.5 billion Japanese
yen (US$12.6 million at December 3, 1998).  As of December 3, 1998, the
Company was eligible to borrow the full amount under the agreement and
there was US$9.3 million outstanding.

  Certain of the Company's notes payable are collateralized by equipment
with a total cost of approximately $20.9 million and accumulated
depreciation of approximately $10.2 million as of December 3, 1998.


7.   Transactions with Affiliates
<TABLE>
<CAPTION>
                                                   For the quarter ended
                                            December 3, 1998   November 27, 1997
--------------------------------------------------------------------------------
<S>                                                 <C>                 <C>
Net sales                                           $    598            $  7,465
Inventory purchases                                   11,129              17,314
Component recovery agreement expenses                 16,085               8,352
Administrative services and other expenses               114                 268
Property, plant and equipment purchases                1,870                 263
Property, plant and equipment sales                        -               5,148
Construction management services                           -                 101

</TABLE>

8.   Income Taxes

  The effective income tax rate for the three months ended December 3, 1998
and November 27, 1997 was 38.5% and 39.5%, respectively, principally
reflecting the federal statutory rate, net of the effect of state taxes.


9.Comprehensive Income (Loss)

  The Company adopted Statements of Financial Accounting Standard ("SFAS")
No. 130, "Reporting Comprehensive Income" as of the first quarter of fiscal
1999.   The adoption of this statement had no impact on the Company's
current or previously reported net income or shareholders' equity.
<TABLE>
<CAPTION>
                                                   For the quarter ended
                                            December 3, 1998   November 27, 1997
--------------------------------------------------------------------------------
<S>                                                 <C>                 <C>
Net income                                          $ 11,659            $  1,065
Foreign currency translation                           (350)             (1,246)
                                                    --------            --------
Comprehensive income (loss)                         $ 11,309               (181)
                                                    ========            ========
</TABLE>

Accumulated other comprehensive income (loss) presented in the accompanying
consolidated balance sheets consists of the cumulative foreign currency
translation adjustment.
<PAGE>                           <6>

Micron Electronics, Inc.
Notes to Consolidated Financial Statements - Continued
(Tabular amounts in thousands, except per share amounts)


10.  Earnings Per Share

  Basic earnings per share is computed using the weighted average number of
common shares outstanding.  Diluted earnings per share is computed using
the weighted average number of common shares outstanding and common
equivalent shares outstanding.  Common equivalent shares result from the
assumed exercise of outstanding stock options. Diluted earnings per share
excludes the effect of antidilutive employee stock options.

<TABLE>
<CAPTION>
                                                   For the quarter ended
                                            December 3, 1998   November 27, 1997
--------------------------------------------------------------------------------
<S>                                                 <C>                 <C>
Net income available to common shareholders         $ 11,659            $  1,065
                                                    ========            ========
Common shares outstanding:
Weighted average shares outstanding - basic           95,953              95,552
Effect of dilutive stock options                       1,363                 371
                                                    --------             -------
Weighted average shares outstanding - diluted         97,316              95,923
                                                    ========            ========
Earnings per share:
  Basic                                             $   0.12            $   0.01
  Diluted                                               0.12                0.01

</TABLE>

11.  Commitments

  As of December 3, 1998, the Company had commitments of $4.2 million for
equipment purchases and $0.4 million for construction of buildings.  In
addition, the Company is required to make minimum royalty payments under
certain agreements and periodically enters into purchase commitments with
certain suppliers.

12.  Contingencies

  Periodically, the Company is made aware that technology used by the
Company may infringe on intellectual property rights held by others.  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.  Resolution of these
claims could have a material adverse effect on future results of operations
and could require changes in the Company's products or processes.

  The Company is involved in litigation and administrative proceedings
primarily arising in the normal course of its business.  In the opinion of
management, the Company's recovery, if any, or the Company's liability, if
any, under any pending litigation or administrative proceedings would not
materially affect its financial condition, operations or cash flows.

  During fiscal 1997, the Company began to collect and remit applicable
sales or use taxes in nearly all states.  In association therewith, the
Company is party to agreements with nearly all states which generally limit
the liability of the Company, if any, for non-remittance of sales and use
taxes prior to such agreements' effective dates.  Management believes the
resolution of any matters relating to the non-remittance of sales or use
taxes prior to the balance sheet date will not have a material adverse
effect on the Company's business and results of operations or cash flows.
<PAGE>

Micron Electronics, Inc.
Notes to Consolidated Financial Statements - Continued
(Tabular amounts in thousands, except per share amounts)

13.  Sale of MCMS Common Stock

  On February 26, 1998, the Company completed the sale of 90% of its
interest in MCMS, Inc. ("MCMS"), formerly Micron Custom Manufacturing
Services, Inc. and a wholly owned subsidiary of the Company for $249.2
million in cash.  Accordingly, results of operations of MCMS subsequent to
February 26, 1998 have been excluded from the Company's results of
operations.
<PAGE>                           <7>

14.  Subsequent Event

  On December 21, 1998, the Company announced it is consolidating its
Micron Electronics Japan operation currently in Japan to its Nampa, Idaho
facility.  The costs associated with exiting the Japanese operation will
result in a non-recurring charge of approximately $3.2 million in the
second quarter of fiscal 1999.
<PAGE>                           <8>

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

  Statements contained in this Form 10-Q  that are not purely historical
are forward-looking statements and are being provided in reliance upon the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995.  All forward-looking statements are made as of the date hereof and
are based on current management expectations and information available to
the Company as of such date.  The Company assumes no obligation to update
any forward-looking statement.  It is important to note that actual results
could differ materially from historical results or those contemplated in
the forward-looking statements.  Forward-looking statements involve a
number of risks and uncertainties, and include trend information.  Factors
that could cause actual results to differ materially include, but are not
limited to, those identified in "Certain Factors" and in other Company
filings with the Securities and Exchange Commission.   All quarterly
references are to the Company's fiscal periods ended December 3, 1998,
September 3, 1998 or November 27, 1997, unless otherwise indicated. The
fiscal year ended September 3, 1998 contained fifty-three weeks compared to
fifty-two weeks in fiscal year 1999.  All tabular dollar amounts are stated
in thousands.  Certain reclassifications have been made in the following
discussion and analysis to present results of operations on a consistent
basis.

Overview

  Micron Electronics, Inc. and its subsidiaries (hereinafter referred to
collectively as "Micron" or the "Company") is a leading provider of
personal computers sold through the direct channel.  The Company develops,
manufactures, markets and supports electronic products for a broad range of
computing and digital applications.  The Company custom builds a wide
variety of notebook and desktop PC systems and servers for its core
customers in the consumer, commercial and public sectors.  The Company's
SpecTek semiconductor memory products operation recovers memory components
for specific applications.  The Company is majority owned by Micron
Technology, Inc. ("MTI").

Results of Operations

Net Sales

  The following table summarizes the Company's net sales by product line:

<TABLE>
<CAPTION>
                                                    First Quarter
                                   ---------------------------------------------
                                          1999                     1998
                                   ---------------------   ---------------------
                                     Amount   % of Sales     Amount   % of Sales
                                   --------   ----------   --------   ----------
<S>                                <C>            <C>      <C>            <C>
PC systems                         $364,159        90.3%   $459,040        82.1%
Contract manufacturing                    -            -     70,201        12.6%
SpecTek memory products              39,337         9.7%     29,649         5.3%
                                   --------       ------   --------       ------
Total net sales                    $403,496       100.0%   $558,890       100.0%
                                   ========       ======   ========       ======

</TABLE>

  Personal Computer Systems.   In the first quarter of fiscal 1999, the
Company experienced PC systems unit sales volume up 2% from the first
quarter of fiscal 1998, driven primarily by higher levels of sales to
governmental entities and sales of notebook products.  The increases in
units were offset by an 18% decrease in average selling prices from the
first quarter of fiscal 1998.  The decline in average selling prices was
primarily attributable to a 12% decrease in the selling prices for the
Company's desktop PC systems and a 40% decline in the selling prices for
notebook PC systems.  Lower prices were largely the result of industry
price competitiveness and the Company's more aggressive pricing across
product lines, particularly on notebook products in order to stimulate
demand.  In addition, during the first quarter of fiscal 1998, the Company
disposed of a large volume of excess PC component inventories, which also
contributed to the decline in net sales between periods.

  Sales to governmental entities, including prime contractors under certain
federal government procurement programs, were 34% of total net sales of PC
systems in the first quarter of fiscal 1999 compared to 28% in the
corresponding period in fiscal 1998.  The level of the Company's
governmental sales is dependent on the buying practices of governmental
entities and the Company's participation in government contracts in the
future, of which there can be no assurance.  As a result, the level of such
sales may vary from quarter to quarter and a significant decline could have
a material adverse effect on the Company's business and results of
operations and cash flows.

  SpecTek Semiconductor Memory Products.   Net sales of semiconductor
memory products were 34% higher in the first quarter of fiscal 1999
compared to the first quarter of fiscal 1998 primarily due to a 174%
<PAGE>                           <9>

increase in megabits of memory shipped, partially offset by a 52% decline
in average selling prices.  The increase in megabits of memory shipped was
primarily due to the strengthening of demand for substantially all memory
products.  The Company has experienced significant volatility in prices
and anticipates significant volatility in prices for future sales of
semiconductor memory products.  The Company's SpecTek semiconductor memory
products results of operations are influenced by a number of factors
including pricing for, and availability of, nonstandard semiconductor
memory components.  See "Certain Factors SpecTek Semiconductor Memory
Products Operation."

  The Company and MTI are parties to a Component Recovery Agreement,
expiring on September 2, 1999, under which MTI is required to deliver to
the Company all of the nonstandard memory components produced at MTI's
semiconductor manufacturing operations.  Expiration, termination or
renegotiation of the Component Recovery Agreement could have a material
adverse effect on the Company's business and results of operations and
cashflows.  A majority of the semiconductor components used in the
Company's SpecTek semiconductor memory products operation has been obtained
from MTI.  In the first quarter of fiscal 1999, the Company obtained 99% of
its components from MTI, compared to 62% in the first quarter of fiscal
1998.  Purchases from sources other than MTI are generally negotiated on a
purchase order basis.  There can be no assurance the Company will be able
to negotiate future purchases from sources other than MTI on terms
acceptable to the Company.  Unless the Company is able to continue
obtaining significant quantities of nonstandard semiconductor memory
components from alternative sources, the Company's SpecTek semiconductor
memory products operation could be limited by the volume of components
supplied by MTI.  There can be no assurance the Company will be able to
negotiate future purchases from MTI on terms acceptable to the Company
after expiration of the Component Recovery Agreement.  Any reduction in the
availability or functionality of nonstandard semiconductor memory
components from the Company's suppliers could have a material adverse
effect on the Company's business and results of operations and cashflows.
See "Certain Factors SpecTek Semiconductor Memory Products
Operation Dependence on Component Recovery Agreement with MTI."

Gross Margin
<TABLE>
<CAPTION>
				                    First Quarter
                                   ---------------------------------------------
                                          1999                    1998
                                   ---------------------   ---------------------
                                     Amount   % of Sales     Amount   % of Sales
                                   --------   ----------   --------   ----------
<S>                                <C>             <C>     <C>             <C>
PC systems                         $ 54,505        15.0%   $ 58,878        12.8%
Contract manufacturing                    -            -     10,091        14.4%
SpecTek memory products              14,313        36.4%      8,245        27.8%
                                   --------                --------
Total gross margin                 $ 68,818        17.1%   $ 77,214        13.8%
                                   ========                ========
</TABLE>

  Personal Computer Systems.  Gross margin from the Company's PC
operations was 15.0% in the first quarter of fiscal 1999 compared to 12.8%
in the first quarter of the prior year.  During the first quarter of fiscal
1999, the Company aggressively priced its products to drive unit volumes
during the government-buying season and to reinvigorate notebook sales.
Gross margin in the first quarter of fiscal 1998 were adversely affected by
significant losses recognized from disposition of excess PC component
inventories.

  The Company expects to continue experiencing significant pressure on its
gross margin on sales of its PC systems as a result of intense competition
in the PC industry and consumer expectations of more powerful PC systems at
lower prices.  In addition, the Company's gross margin percentage will
continue to depend in large part on its ability to effectively forecast
demand and manage its inventories of PC components.  See ''Certain
Factors Personal Computer Systems  Competition'' and ''Certain
Factors Personal Computer Systems Inventory Management.''

  SpecTek Semiconductor Memory Products.  The gross margin realized by the
Company's SpecTek semiconductor memory products operation was higher in the
first quarter of fiscal 1999 compared to the first quarter of fiscal 1998
primarily due to lower costs of components.  The Company has experienced
significant volatility in selling prices and expects average selling prices
for its SpecTek semiconductor memory products to continue to exhibit
significant volatility.  As a result, the gross margin for the Company's
SpecTek semiconductor memory products operation could decline and adversely
affect the Company's business and results of operations and cash flows.
See "Certain Factors SpecTek Semiconductor Memory Products
Operation Pricing of Semiconductor Memory Products."

  The Company's cost of components obtained from MTI are equal to one-half
of the net operating income generated from sales of such components.  See
"Certain Factors SpecTek Semiconductor Memory Products Operation Dependence
on Component Recovery Agreement with MTI."
<PAGE>                           <10>


Selling, General and Administrative
<TABLE>
<CAPTION>
                                                          First Quarter
                                               ---------------------------------
                                                  1999       % Change       1998
                                               -------       --------    -------
<S>                                            <C>            <C>        <C>
Selling, general and administrative            $52,396        (27.5%)    $72,258
as a % of net sales                              13.0%                     12.9%

</TABLE>

  Selling, general and administrative expenses decreased by
$19.9 million in the first quarter of fiscal 1999 compared to the
corresponding period in 1998 primarily due to the Company's continued focus
on operational efficiencies, cost containment efforts, and the sale of 90%
of its interest in MCMS, Inc. in fiscal 1998.  Partially offsetting this
decrease was the Company's aggressive expansion of its field sales force
personnel, which included the addition of more than 100 sales people
dedicated to the mid-market.

Research and Development
<TABLE>
<CAPTION>
                                                          First Quarter
                                              ----------------------------------
                                                 1999        % Change       1998
                                              -------        --------    -------
<S>                                           <C>             <C>        <C>
Research and development                      $ 1,451         (59.5%)    $ 3,582
as a % of net sales                              0.4%                       0.6%

</TABLE>

Research and development expenses were lower between the quarters, as the
first quarter of fiscal 1998 had significant development activities
associated with the Company's NetFRAME enterprise server operation.

Other Expense, net

Other Expense, net, in the first quarter of fiscal 1998 included $2.7
million for the write-off of software costs from the abandoned development
of an internal use software application.

Income Tax Provision
<TABLE>
<CAPTION>
                                                          First Quarter
                                              ----------------------------------
                                                 1999        % Change       1998
                                              -------        --------     ------
<S>                                           <C>              <C>        <C>
Income tax provision                          $ 7,299          948.7%     $  696

</TABLE>

  The effective income tax rate of 38.5% and 39.5%, in the first quarters
of fiscal 1999 and 1998, respectively, principally reflected the federal
statutory rate, net of the effect of state taxes.

Liquidity and Capital Resources

  As of December 3, 1998, the Company had cash, cash equivalents and liquid
investments of $369.7 million, representing an increase of $12.0 million
compared to September 3, 1998.  Principal sources of liquidity in the first
quarter of fiscal 1999 were cash flows from operations of $23.7 million and
issuance of common stock of $2.8 million pursuant to the exercise of
options under the Company's 1995 Stock Option Plan.  Principal uses of cash
in the first quarter of fiscal 1999 were property, plant and equipment
expenditures of $13.0 million primarily for expansion and capacity
improvements of the Company's manufacturing operations and repayment of
debt of $1.8 million.

  The Company has an unsecured credit agreement, expiring June 2001, with a
group of financial institutions providing for borrowings totaling $100.0
million.  As of December 3, 1998, the Company was eligible to borrow the
full amount under the agreement, but had no borrowings outstanding.  Under
the agreement, the Company is subject to certain financial and other
covenants including certain financial ratios and limitations on the amount
of dividends declared or paid by the Company.

  The Company's wholly-owned subsidiary, Micron Electronics Japan K.K., has
an unsecured revolving credit facility with a financial institution,
expiring June 1999, providing for borrowings of up to 1.5 billion Japanese
yen (US$12.6 million at December 3, 1998).  As of December 3, 1998, the
Company was eligible to borrow the full amount under the agreement and
there was US$9.3 million outstanding.
<PAGE>                           <11>

  On October 11, 1996, the Company filed a registration statement with the
Securities and Exchange Commission allowing for the issuance from time to
time by the Company of debt and/or equity securities with a value of up to
$75.0 million, of which $51.0 million has been issued.

  At December 3, 1998, the Company had commitments of $4.6 million for
capital expenditures for expansion and upgrade of facilities and equipment.
The Company anticipates making capital expenditures in fiscal 1999 in
excess of $50 million.

  The Company expects that its future working capital requirements will
continue to increase.  The Company believes that currently available cash
and cash equivalents, liquid investments, cash flows from operations, the
Company's current credit facilities and equipment financings will be
sufficient to fund its operations for the next twelve months.

Subsequent Factors

  On December 21, 1998, the Company announced it is consoldiating its Micron
Electronics Japan operation currently in Japan to its Nampa, Idaho facility.
The costs associated with exiting the Japanese operation will result in a
non-recurring charge of approximately $3.2 million in the second quarter
of fiscal 1999.

Subsequent Event

  In addition to factors discussed elsewhere in this Form 10-Q and in other
Company filings with the Securities and Exchange Commission, the following
are important factors which could cause actual results or events to differ
materially from the historical results of the Company's operations or those
results or events contemplated in any forward-looking statements made by or
on behalf of the Company.

General

 Fluctuations in Operating Results and Stock Price

  The Company's past operating results have been, and its future operating
results may be, subject to seasonality and other fluctuations, on a
quarterly and an annual basis, as a result of a wide variety of factors,
including, but not limited to, industry competition, the Company's ability
to accurately forecast demand and selling prices for its PC products,
fluctuating market pricing for PCs and semiconductor memory products,
seasonal government purchasing cycles, inventory obsolescence, the
Company's ability to effectively manage inventory levels, changes in
product mix, manufacturing and production constraints, fluctuating
component costs, the effects of product reviews and industry awards,
availability and pricing of the memory components used by the Company's
SpecTek semiconductor memory products operation, critical component
availability, seasonal cycles common in the PC industry, the timing of new
product introductions by the Company and its competitors and global market
and economic conditions.  As a result, the operating results for any
particular period are not necessarily indicative of the results that may
occur in any future period.  The trading price of the common stock of the
Company is subject to significant fluctuations due to general market
conditions and financial performance of the Company, MTI and other
companies in the PC industry, announcements of technological innovations,
new commercial products or new strategies by competitors, component
availability and pricing, and other factors.

 Management

  The Company has experienced increased complexity of its operations, in
operating and financial information systems and in its scope of operations.
This increased complexity has resulted in new and increased
responsibilities for the Company's management and has placed, and continues
to place, significant demands upon the Company's management, operating and
financial information systems and other resources and systems.   The
Company continues to consider various expansion alternatives, including
expansion of facilities, acquisition or establishment of facilities in new
geographic regions and certain strategic relationships.  The Company
recently completed a reorganization of its operation along its customer
segments.  There can be no assurance that the Company's management
resources, operating and financial information systems and other resources,
and systems will be adequate to support the Company's existing or future
operations, the failure of which could have a material adverse effect on
the Company's business and results of operations and cash flows.
<PAGE>                           <12>

 Intellectual Property Matters

  It is common in the electronics industry for patent, trademark and other
intellectual property rights claims to be asserted against companies,
including component suppliers and PC manufacturers.  Periodically, the
Company is made aware that technology used by the Company may infringe on
intellectual property rights held by others.  The Company evaluates all
such claims and, if necessary and appropriate, seeks to obtain licenses for
the continued use of such technology.  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 would be placed at a
competitive disadvantage if it were unable to obtain such licenses upon
terms at least as favorable as those experienced by the Company's
competitors.  The Company has entered into several intellectual property
license agreements, and as a majority-owned subsidiary of MTI, is licensed
under certain license agreements between MTI and third parties.  The
Company's rights under license agreements between MTI and third parties may
terminate in the event that the Company is no longer a majority-owned
subsidiary of MTI.  Intellectual property agreements and license agreements
generally require one-time or periodic royalty payments and are subject to
expiration at various times.  If the Company or its suppliers are unable to
obtain licenses necessary to use intellectual property in their products or
processes, the Company may be forced to market products without certain
technological features or software, discontinue sales of certain of its
products and/or defend legal actions taken against it relating to allegedly
protected technology.  The inability of the Company to obtain licenses
necessary to use certain technology, or an inability to obtain such
licenses on competitive terms, or any litigation determining that the
Company, in the manufacture or sale of its products, has infringed on the
intellectual property rights of third parties, could have a material
adverse effect on the Company's business and results of operations and cash
flows.

 MTI Ownership of Common Stock of the Company

  As of December 3, 1998, MTI owned 63% of the Company's outstanding common
stock.  In addition, three of the five directors of the Company are also
directors of MTI, including Steven R. Appleton, Chairman and Chief
Executive Officer of MTI.  So long as MTI continues to own a majority of
the outstanding common stock of the Company, MTI will have the ability to
control the outcome of matters requiring shareholder approval, including
the election of directors, and generally will have the ability to control
the management and certain financial and other affairs of the Company.
Termination or modification of certain of the Company's arrangements with
MTI resulting in terms less favorable to the Company could adversely affect
the Company's business and results of operations.  In the event that MTI's
ownership of the Company were to decrease below certain levels, certain
arrangements may be terminated by MTI, which could have a material adverse
effect on the Company's business and results of operations and cashflows.
See "Intellectual Property Matters" and "SpecTek Semiconductor Memory
Products Operation Dependence on Component Recovery Agreement with MTI."

  The level of MTI's ownership of the common stock of the Company may limit
the Company's ability to complete future equity financings.  In addition,
the sale on the open market of substantial amounts of shares of common
stock of the Company currently held by MTI could adversely affect the
prevailing market price of common stock of the Company.  MTI's ability to
sell shares of common stock of the Company, unless registered under the
Securities Act of 1933, as amended (the "Securities Act"), is subject to
volume and other restrictions pursuant to Rule 145 promulgated under the
Securities Act.

  On October 11, 1996, the Company filed a registration statement with the
Securities and Exchange Commission allowing for the issuance from time to
time by the Company of debt and/or equity securities with a value of up to
$75.0 million, of which $51.0 million has been issued.  The registration
statement also allows for an additional $250.0 million of outstanding
common stock of the Company to be sold by certain existing shareholders,
consisting of MTI and certain management employees, of which $212.9 million
has been sold.

 Dependence on Key Personnel

  The future success of the Company will depend, in part, on its ability to
attract and retain key management, technical and sales and marketing
personnel.  The Company attempts to enhance its management and technical
expertise by recruiting qualified individuals who possess desired skills
and experience in certain targeted areas.  There is competition for such
personnel in the electronics industries, and the Company's inability to
retain employees and attract and retain sufficient additional employees,
and information technology, engineering and technical support resources,
could have a material adverse effect on the Company's business and results
of operations.  There can be no assurance that the Company will not lose
key personnel or that the loss of any key personnel will not have a
material adverse effect on the Company's business and results of operations
and cash flows.
<PAGE>                           <13>

 Year 2000

  The Year 2000 presents issues because many computer hardware and software
systems use only the last two digits to refer to a calendar year. Thus,
when the Year 2000 arrives, some systems may erroneously believe it is 1900
or some other year.  In 1998, the Company established a Year 2000 project
team with representatives from all of the Company's business units.  The
Company is currently in the process of assessing the Year 2000 readiness of
the hardware associated with its internal information technology systems,
as well as embedded technology associated with its manufacturing and
physical facilities.  The Company anticipates completion of this evaluation
by the end of January 1999.  Additionally, the software utilized on
information technology systems within the Company has previously been
evaluated.  Where necessary, appropriate remediation efforts have or will
be undertaken.  The Company expects to successfully implement necessary
modifications of its internal systems to timely address Year 2000 issues.
However, if necessary modifications are not made on a timely basis, Year
2000 issues could have a material adverse effect on the Company's business
or financial condition and cashflows.

  In addition to internal Year 2000 readiness efforts, the Company is in
process of contacting its key suppliers to assess their compliance.  It is
anticipated that this assessment process will be substantially completed by
the end of January 1999.  The Company anticipates that the assessment
process will minimize risks to the Company, which might arise from failure
of such suppliers to adequately address Year 2000 issues.   Commencing in
the first calendar quarter of 1999, the Company plans to develop
contingency plans designed to address situations that might arise from the
failure of the Company or its suppliers to timely and adequately address
Year 2000 issues.  However, there can be no assurance that the failure of
suppliers to address Year 2000 issues will not have a material adverse
effect on the Company's business or financial condition.

  Through the end of fiscal 1998 and into the first quarter of fiscal 1999,
the Company has incurred incremental costs of approximately  $1.5 million
related to Year 2000 assessment and remediation efforts.  The total
estimated additional cost to complete the Company's internal readiness
program is from $1.0 million to $3.0 million.  This estimate, which does
not include any costs which may be incurred by the Company if its key
suppliers fail to timely address Year 2000 issues, is based on currently
known circumstances and various assumptions regarding future events.  The
actual cost of Year 2000 assessment and remediation efforts could differ
materially from the estimate.

  All Micron-branded hardware products shipped since August 26, 1996 have
BIOS clocks that will automatically roll over to "2000" at the century
change.  Additionally, the Company has provided software utilities to
bring earlier Micron-branded hardware products to a functional level of
Year 2000 compliance.  The Company believes that it is not legally
responsible for any costs incurred by customers to address Year 2000
issues.  However, the Company recognizes the potential for claims against
it and other manufacturers arising from products which may not support the
century change, and there can be no assurance that such claims would not
have a material adverse effect on the Company's business or financial
condition and cash flows.

  On October 26, 1998, the Company was sued in state court in Canyon
County, Idaho, by Hannah Films, Inc., on behalf of itself and on behalf of
an as-of-yet unidentified and uncertified class of plaintiffs alleging
fraud, breach of the implied warranty of merchantability, violation of the
Magnuson-Moss Consumer Protection Act, and violation of the Idaho Consumer
Protection Act arising out of the Year 2000 status of a personal computer
sold by the Company to Hannah Films, Inc., in October 1995.  The Company is
defending the matter.  While there can be no assurance as to the ultimate
disposition of the case, the Company does not currently believe that the
resolution of this litigation will have a material adverse effect on the
Company's business or financial condition and cashflows.

 Government Regulation

 The Company is subject to a variety of federal, state, local and foreign
laws and regulations, including, but not limited to, Federal Communications
Commission regulations, governmental procurement regulations, import and
export regulations, Federal Trade Commission regulations, securities
regulations, environmental regulations, antitrust regulations, and labor
regulations.  Any failure by the Company to comply with such regulations in
the past, present or future could subject the Company to liabilities and/or
the suspension of its operations, which could have a material adverse
effect on the Company's business and results of operations and cash flows.
<PAGE>                           <14>

Personal Computer Systems

 Competition

  The PC industry is highly competitive and has been characterized by
intense pricing pressure, generally low gross margin percentages, rapid
technological advances in hardware and software, frequent introduction of
new products, and rapidly declining component costs.  Competition in the PC
industry is based primarily upon brand name recognition, performance,
price, reliability and service and support.  The Company's sales of PC
systems have historically benefited from increased name recognition and
market acceptance of the Company's PC systems, primarily resulting from the
receipt by the Company of awards from trade publications recognizing the
price and performance characteristics of Micron brand PC systems and the
Company's service and support functions.  As a result of PC industry
standards, the Company and its competitors use many of the same components,
typically from the same set of suppliers, which limits the Company's
ability to technologically and functionally differentiate its products.
Many of the Company's PC competitors have greater brand name recognition
and market share, offer broader product lines, have substantially greater
financial, technical, marketing and other resources than the Company.  In
addition, the Company's competitors may benefit from component volume
purchasing and product and process technology license arrangements that are
more favorable in terms of pricing and availability than the Company's
arrangements.  In addition, the Company may be at a relative cost
disadvantage to certain of its competitors as a result of the Company's
U.S. dollar denominated purchases of PC components during a period of
relative weakening of the U.S. dollar.  The failure of the Company to
compete effectively in the marketplace could have an adverse effect on the
Company's business and results of operations and cash flows.

  The Company competes with a number of PC manufacturers, which sell their
products primarily through direct channels, including Dell Computer, Inc.
and Gateway 2000, Inc.  The Company also competes with PC manufacturers,
such as Apple Computer, Inc., Compaq Computer Corporation, Hewlett-Packard
Company, International Business Machines Corporation, NEC Corporation and
Toshiba Corporation among others, which have traditionally sold their
products through national and regional distributors, dealers and value
added resellers, retail stores and direct sales forces and are now
beginning to sell their products through the direct channel.  In addition,
the Company expects to face increased competition in the U.S. direct sales
market from foreign PC suppliers and from foreign and domestic suppliers of
PC products that decide to implement, or devote additional resources to, a
direct sales strategy.  In order to gain an increased share of the United
States PC direct sales market, these competitors may effect a pricing
strategy that is more aggressive than the current pricing in the direct
sales market or may have pricing strategies influenced by relative
fluctuations in the U.S. dollar compared to other currencies.

  The Company believes that the rate of growth in worldwide sales of PC
systems, particularly in the United States, where the Company sells a
substantial majority of its PC systems, has declined and may remain below
the growth rates experienced in recent years.  Any general decline in
demand or decline in the rate of increase in demand for PC systems could
increase price competition and could have a material adverse effect on the
Company's business and results of operations and cash flows.

 Inventory Management

  The Company's ability to compete successfully in the PC market in the
future will depend in large part on its ability to accurately forecast
demand for its PC products and effectively manage its PC inventories.  The
Company's PC operations focus on the direct sale of assemble-to-order PC
systems that feature components incorporating the latest technological
developments in the PC industry.  The Company has experienced in the past,
and could experience in the future, excess PC inventories and inventory
obsolescence resulting from, among other things, the Company's inaccuracy
in forecasting demand for its PC products, the typically longer lead times
associated with notebook product supply, the fast pace of technological
developments in the PC industry and the short product life cycles of PC
systems and components.  In addition, because high volumes of quality
components are required for the manufacture of the Company's PC systems,
the Company has experienced in the past, and expects to experience in the
future, shortages and other supply constraints of key components.  Such
shortages or supply constraints have in the past adversely affected, and
could in the future adversely affect, the Company's ability to ship
products on schedule or at expected gross margins.  To be successful in the
future, the Company must accurately forecast demand for its PC products and
obtain adequate, but not excessive, supplies of components to meet actual
demand.  The failure of the Company to manage its inventories effectively
could result in excess PC inventories, inventory obsolescence, component
shortages and untimely shipment of products, any of which could have a
material adverse effect on the Company's business and results of operations
and cash flows.

 Dependence on Key Sources of Supply

  The Company focuses on providing PC systems that feature components and
software incorporating the latest technological developments in the PC
industry, which components are periodically in short supply and are
available from sole or a limited number of suppliers.  As a result, the
Company has experienced in the past, and expects to experience in the
future, shortages in the components used in its PC systems.    The
microprocessors used in the Company's PC systems are manufactured
exclusively by Intel and, from time to time, the Company has been unable to
obtain sufficient quantities of certain Intel microprocessors.  In
<PAGE>                           <15>

addition, a significant portion of the RAM components used in the Company's
PC systems are supplied by MTI, and the Company generally relies on MTI to
supply the latest memory densities and configurations available.  The
Company relies, to a certain extent, upon its suppliers' abilities to
enhance existing products in a timely and cost-effective manner, to develop
new products to meet changing customer needs and to respond to emerging
standards and other technological developments in the PC industry.  The
Company's reliance on a limited number of suppliers and on a strategy of
incorporating the latest technological developments into its PC systems
involves several risks, including the possibility of shortages and/or
increases in costs of components and software, and risk of reduced control
over delivery schedules, which could have a material adverse effect on the
Company's business and results of operations and cash flows.

  The Company's notebook products are currently assembled by third-party
manufacturers.  These outsourcing arrangements and any future outsourcing
arrangements that the Company may enter into may reduce the direct control
the Company has over certain components and the assembly of such products.
There can be no assurance that the Company's outsourcing arrangements will
not result in quality problems or affect the Company's ability to ship such
products on a timely basis or the flexibility of the Company to respond to
changing market conditions.

 State Taxation

  During fiscal 1997, the Company began to collect and remit applicable
sales or use taxes in nearly all states.  In association therewith, the
Company is party to agreements with nearly all states which generally limit
the liability of the Company, if any, for non-remittance of sales and use
taxes prior to such agreements' effective dates.  Management believes the
resolution of any matters relating to the non-remittance of sales or use
taxes prior to the balance sheet date will not have a material adverse
effect on the Company's business and results of operations and cashflows.

SpecTek Semiconductor Memory Products Operation

 Dependence on Component Recovery Agreement with MTI

  The Company has a Component Recovery Agreement (the "Component Recovery
Agreement") with MTI, which expires on September 2, 1999, and may be
terminated by MTI in the event that MTI's ownership of the Company falls
below 30%.  Under the Component Recovery Agreement, MTI is required to
deliver to the Company all of the nonstandard memory components produced at
MTI's semiconductor manufacturing operations.  The Company's cost of such
components generally is determined as one-half of the operating income
generated from the Company's SpecTek sales of semiconductor memory products
supplied by MTI.  Historically, a substantial majority of the components
used in the Company's SpecTek semiconductor memory products operation has
been obtained from MTI.  There can be no assurance the Company will be able
to negotiate future purchases on terms acceptable to the Company from MTI
after the expiration of the Component Recovery Agreement.  Any reduction in
the availability or functionality of nonstandard semiconductor memory
components from MTI could have a material adverse effect on the Company's
business and results of operations and cash flows.

  Many semiconductor memory manufacturers are reluctant to sell nonstandard
memory components because such components could compete with their full
specification memory components for similar applications.  In addition,
some manufacturers are concerned that subsequent testing performed by a
recovery operation could reveal proprietary data regarding manufacturing
yields and processes.  As a result, there can be no assurance that the
Company will be able to obtain nonstandard memory components from
semiconductor manufacturers in quantities sufficient to meet demand for the
Company's SpecTek products.  Any reduction in the availability or
functionality of nonstandard memory components from the Company's suppliers
could have a material adverse effect on the Company's business and results
of operations and cash flows.

 Pricing of Semiconductor Memory Products

  Pricing for the Company's SpecTek semiconductor memory products
fluctuates, to a large degree, based on industry-wide pricing for
semiconductor memory products.  Historically, the Company has experienced
significant declines in the average selling prices of its SpecTek
semiconductor memory products as industry-wide average selling prices for
full specification semiconductor memory products experienced sharp
declines.  The Company believes that such declines in average selling
prices of semiconductor memory products was due primarily to changes in the
balance of supply and demand for these commodity products and changes in
relative weakness or strength of certain currencies, and the Company is
unable to predict the impact of semiconductor memory product market
dynamics in future periods.  Due to increased market risk associated with
holding purchased memory components in inventory, the Company has
experienced in the past, and may experience in the future, losses from
write-downs of memory component inventories in periods of declining prices.
Further declines in pricing for semiconductor memory products would likely
<PAGE>                           <16>

result in declines in average selling prices of the Company's SpecTek
semiconductor memory products, which could have a material adverse effect
on the Company's business and results of operations and cash flows

 Memory Product Transition

  The semiconductor memory industry is characterized by, among other
things, rapid technological change, frequent product introductions and
enhancements, difficulties experienced in transitioning to new products,
relatively short product life cycles and volatile market conditions. During
periods of product transition, the Company's SpecTek semiconductor memory
products operation has experienced in the past, and may experience in the
future, significant increases in component test times and corresponding
decreases in throughput.  Future gross margins could be adversely affected
if the Company is unable to effectively transition to new products in a
timely fashion.
<PAGE>                           <17>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

  Substantially all of the Company's liquid investments and a majority of
its debt are at fixed interest rates, and therefore the fair value of these
instruments is affected by changes in market interest rates.  However, as
of December 3, 1998, approximately 80% of the Company's liquid investments
mature within three months and the remainder within one year.  As of
December 3, 1998, the Company believes the reported amounts of liquid
investments and debt to be reasonable approximations of their fair values
and has the ability and intent to hold these instruments to maturity.  As
result, the Company believes that the market risk arising from its holdings
of financial instruments is minimal.

  The Company uses the U.S. Dollar as its functional currency, except for
its operations in Japan.  The assets and liabilities of the Company's
Japanese operations are translated into U.S. Dollars at exchange rates in
effect at the balance sheet date.  Income and expense items are translated
at the average exchange rates prevailing during the period.  Aggregate
transaction gains and losses included in the determination of net income
have not been material.
<PAGE>                           <18>

                        PART II.  OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Shareholders
--------------------------------------------------------

  The Company's 1998 Annual Meeting of Shareholders was held on November
23, 1998 at the Nampa Civic Center, Nampa, Idaho.  At the meeting, the
following items were submitted to a vote of the shareholders.  At the
meeting, 95,885,574 shares were entitled to vote.

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

<TABLE>
<CAPTION>

     Name of Nominee               Votes Cast For             Withhold Authority
     ---------------------------------------------------------------------------
     <S>                               <C>                               <C>
     Steven R. Appleton                89,027,813                        234,870
     Joel J. Kocher                    88,981,428                        281,255
     Robert A. Lothrop                 88,965,740                        296,943
     T. Erik Oaas                      89,002,860                        259,823
     John R. Simplot                   88,991,459                        271,224
</TABLE>

  (2)  The ratification of the appointment of PricewaterhouseCoopers LLP
     as independent public accountants of the Company for the fiscal year
     ending September 2, 1999 was approved with 89,162,705 votes in favor,
     54,901 votes against, 45,077 abstentions and no broker non-votes.


Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------

  (a)  The following are filed as a part of this report:
<TABLE>
<CAPTION>

  Exhibit    Description
  ------------------------------------------------------------------------------
  <S>        <C>
  10.58      Micron Electronics, Inc. Management and Executive Incentive Plan
  10.59      Amendment No. 1 to Credit Agreement, dated November 5, 1998,
             between the Company and certain financial institutions named
             therein
  10.60      Guaranty Agreement, dated November 5, 1998, between the Company
             and certain financial institutions named therein
  10.61      Amendment to the Micron Electronics, Inc. 1995 Stock Option Plan
  27         Financial Data Schedule

</TABLE>

  (b)  Reports on Form 8-K:

  The registrant did not file any reports on Form 8-K during the quarter
  ended December 3, 1998.


  Micron and Micron Electronics are trademarks of the Company, and
NetFRAME, and SpecTek are registered trademarks of the Company.  All other
product names appearing herein are for identification purposes only and may
be trademarks of their respective companies.
<PAGE>                           <19>

                                SIGNATURES

  Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                              MICRON ELECTRONICS, INC.
                              --------------------------------------------------
                              (Registrant)


Dated:   January 6, 1999
                              /s/  Joel J. Kocher
                              --------------------------------------------------
                              Joel J. Kocher, Chairman and
                              Chief Executive Officer



                              /s/  Brad J. Grover
                              --------------------------------------------------
                              Brad J. Grover, Controller and
                              Director of  Finance





<PAGE>                           <20>