Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
'ArtM72' pid='47965' datel Wrote:Russ Fischer is a really smart guy that posts from time to time on Seeking Alpha. He was a strong proponent for MU a couple of years back on IV's OVTI board. He is now very bullish on Intel. In one of his latest posts (http://seekingalpha.com/article/2311335-...gh-margins) Russ talks about Intel and a very real possibility of its producing a DRAM on processor chip. Interesting read as it also talks a bit about MU and Samsung.
Actually, thanks for that, Art. In case you know him personally, can you ask him what he thinks of POET Technologies? They come with some big claims, arguing they can integrate optics on a normal dye delivering order of magnitude improvements in speed and energy consumption. Their head scientist is, as far as I can make out, a respectable scientist from University of Connecticut.
Sorry for hijacking the thread with this, Fundy
Posts: 61
Threads: 8
Joined: Mar 2014
Reputation:
1
08-01-2014, 07:12 AM
(This post was last modified: 08-01-2014, 07:22 AM by Fundy_.)
'ArtM72' pid='47965' datel Wrote:Russ Fischer is a really smart guy that posts from time to time on Seeking Alpha. He was a strong proponent for MU a couple of years back on IV's OVTI board. He is now very bullish on Intel. In one of his latest posts (http://seekingalpha.com/article/2311335-...gh-margins) Russ talks about Intel and a very real possibility of its producing a DRAM on processor chip. Interesting read as it also talks a bit about MU and Samsung.
Russ is making many assumptions in that article, so it's hard to draw any real conclusions. I also see this as very unlikely, particularly for the computer / server industry, perhaps more likely in the mobile industry. Even if this does happen, it is a long way off and will not kill off the demand for standalone DRAM. This is actually a really interesting hypothesis, but it is speculation and certainly shouldn't be used to make an investment decision, anymore than any other speculation.
'ArtM72' pid='47984' datel Wrote:I see Fischer just wrote a new article for SA on MU. I'd check it out before jumping into MU at this time. http://seekingalpha.com/article/2364705-micron-maybe-it-isnt-different-this-time?isDirectRoadblock=true&app=1&uprof=
Now, on this article, I have to, respectively, highly disagree with Russ. In fact, Samsung themselves stated in their CC that this is not the case and, indeed, it would be terrible for their business to do this. Consider that DRAM is one of the only strong parts of their business, with nearly everything else in decline. By raising production and undercutting DRAM prices, they would not only kill their own profitability in one of their few remaining strong businesses, but they would help their largest competitors (i.e Apple) raise their margins, which would allow them to further compete with Samsung. I'm not sure why Russ think this is even a remote possibility, let alone suggesting it to be likely.
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
Shares of Micron Technology (MU) are down 16 cents, or half a percent, at $30.93, following an analyst day held by the company in Hong Kong yesterday. Stifel Nicolaus’s Kevin Cassidy, reiterating a Buy rating, and a $39 price target, writes that the meeting reiterated management’s contention “the memory market has changed” and that Micron is focused on investment returns. Richard Wittington of Drexel Hamilton, who also has a Buy on the shares, writes simply that “The message is they’re sold out, ASPs on the rise, as demand remains vibrant.”
Tech Trader Daily - Barrons.com
Posts: 61
Threads: 8
Joined: Mar 2014
Reputation:
1
08-23-2014, 09:00 AM
(This post was last modified: 08-23-2014, 10:38 AM by Fundy_.)
'Fundy_' pid='47951' datel Wrote:
(Quote slightly edited to summarize this post in a few sentences).
Micron is up roughly ~40% since I made this thread, it's still at an ~11 P/E and, in my view, significantly undervalued. This morning it is now down nearly 7% in PM based on an unwarranted downgrade by Goldman. The downgrade was based on Samsung stating they are increasing DRAM supply, but it is an internal increase, not an external increase. Samsung has already stated they won't increase supply just to take market share, nor will they increase supply if it does not continue to be profitable to them. This could be a fantastic buying opportunity.
The downswing continued and, putting my money where my mouth is, I added 410 shares at $29.40 about a week after I posted the quote above and planned to add another ~400 shares if it went below $29, which it never did. As an obligatory update, it has risen nearly all the way back to $33.32, nearing its all time high of $34.85. The trailing P/E is currently at 10.94 and concensus EPS for 2015 is $3.55. Assuming a more fair P/E of 15 at the 2015 concensus (which I believe is very lowballed), it presents a 59.8% upside to $53.25. There have been many indications by all involved in the oligarchy that the (external) supply will remain limited as the demand is growing, allowing for continued price control. The iPhone 6 is also going to be great for Micron, given that they are the primary supplier of DRAM for Apple. The current concensus price target of the 26 analysts posted to Yahoo is $38.69, which presents a 16.1% upside.
![[Image: 3603aeef908d3ae96045337f26f690c7.png]](http://i.gyazo.com/3603aeef908d3ae96045337f26f690c7.png)
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
Nice to see you doing well here, Fundy. Congrats. The uptrend still is intact:
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
05-12-2016, 07:36 AM
(This post was last modified: 05-12-2016, 07:45 AM by admin.)
There seems to be no end in sight for the decline in DRAM prices. DRAM constitutes approximately 54% of the total revenue. The shift from PCs to mobiles is adversely affecting the demand for DRAMs, and the management cannot do much about it. This is a technological shift, and the company should guide its focus according to the changing times, or perish.
Micron: The $10 Floor Cannot Hold For Long - Micron Technology Inc. (NASDAQ:MU) | Seeking Alpha
First, a basic overview: Hynix is one of Micron's main competitors for both DRAM and NAND (two different types of memory). As most investors are probably aware, Micron's two biggest business segments are DRAM (64%) and NAND (33%). For DRAM, Hynix is one of two major competitors of Micron, with the other competitor being Samsung (OTC:SSNLF). Currently, memory (particularly DRAM) is very oversupplied, which is especially problematic for Micron, given that they have the highest cost structure. Back to the earnings call - for one, Hynix indicated that they expect DRAM and NAND shipments to grow by roughly 15% and 30%, respectively in Q2, but still expect ASPs to decrease, although not as severely as they have been previously (14% Q/Q for Hynix). For the full year, they are actually projecting mid 20% growth for DRAM and mid to high 30% growth for NAND.
Micron's Rise After Hynix News Is A False Positive - Micron Technology Inc. (NASDAQ:MU) | Seeking Alpha
The market also is worried about the expensive $1.25 billion debt offering at 7.5%, which will eat into future earnings. Investors were shocked to see the debt being raised at such a high rate given that there is abundance of cheap capital.
Micron: The $10 Floor Cannot Hold For Long - Micron Technology Inc. (NASDAQ:MU) | Seeking Alpha
The Company generated operating cash flow of $763 million during the second quarter and we ended the quarter with cash and marketable investments of approximately $5.1 billion." - Ernie Maddock, Micron's Q2 2016 earnings call transcrip
Micron: There Is More Upside Potential Than Downside Risk - Micron Technology Inc. (NASDAQ:MU) | Seeking Alpha
A couple of recent upgrades for Micron came from Raymond James and Brean Capital, along with price targets of $17 and $14, respectively. On the other side, Nomura and Susquehanna downgraded Micron in March. Nomura dropped its price target to just $8 per share, while Susquehanna dropped its target to $10. Despite the wide gap in price targets, there's really only one difference between the bullish analysts and the bearish analysts. The bullish analysts believe that the DRAM industry has fundamentally changed because of consolidation. There are now only three major DRAM manufacturers, and the idea is that these companies will attempt to maximize profits instead of gunning for market share. Supply-driven cycles may still occur, but they won't be as severe compared to the past.
Why Analysts Disagree About Micron Technology Inc. -- The Motley Fool
Combine Samsung's aggressiveness, Micron's unwillingness to cut production, continued weak demand for PCs, and the first quarterly decline in global smartphone shipments, and you have the makings of a deep slump in the memory-chip market. The bullish analysts still believe that the effects of consolidation will ultimately win out, but nearly everything is pointing in the opposite direction. So far, I don't see any evidence at all that the industry has fundamentally changed.
Why Analysts Disagree About Micron Technology Inc. -- The Motley Fool
The oversupply has started eating into Micron's mobile business. The mobile segment posted a $21 million operating loss in the second quarter, compared to a $262 million operating profit a year ago. Overall, Micron reported a net loss in the second quarter of $97 million compared to a net gain of $934 million in the same period a year ago. Red ink of this magnitude makes Micron a fundamentally weak equity.
Micron Technology Has Had a Rough 2016 - Pg.2 - TheStreet
Micron Technology operates in the semiconductors space across four segments: Computer and Networking Business Unit, Mobile Business Unit, Storage Business Unit and Embedded Business Unit. Micron's main products are DRAM (dynamic random-access memory) and NAND (negative-AND gate) memory chips, which are mainly used in personal computers (PCs). Apart from Micron, Samsung and SK Hynix are the other two companies who make DRAM and NAND chips. However, with the advent of tablet computers and smartphones, the PC market has taken a hit. Mobile computing is now more important as consumers rely increasingly on these devices. Tablets and smartphones also require these chips, but after a period of prolific growth, this market has slowed.
Micron Technology Has Had a Rough 2016 - TheStreet
DRAMeXchange expects the DRAM space to maintain profitability, as “overall production capacity has not increased significantly” even though oversupply still persists.
Downward Trend in DRAM Prices Expected to Continue in 2016 - Market Realist
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
Sterne Agee analyst Doug Freedman reiterated a Buy rating on shares of Micron, with a price target of $18, following recent news that company had begun mass production of GDDR5X memory. The first graphics card to use the new type of graphics DRAM will be NVIDIA’s upcoming GeForce GTX 1080 graphics card.
Freedman noted, “One of our keys to 2016 memory investment is the tracking of new product development roadmaps – including High Bandwidth Memory (HBM) that uses thru-silicon via (TSV). Recent data points appear to suggest a greater than expected challenge to ramping HBM-based products. NVIDIA’s GTX1080/70 product uses GDDR5X from Micron, while a positive for Micron in the near term, it appears to us that the original plan was calling for HBM2 in this segment of the GPU market. We see a common thread forming as Intel’s Knights Landing also relies on TSV based memory which is also slow to reach commercial volumes. Commercialization of HBM is required to remove the present memory bandwidth bottleneck to enable performance gains from next-gen processors.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Doug Freedman has a yearly average return of15.9% and a 62.8% success rate. Freedman has a -10.7% average return when recommending MU, and is ranked #48 out of 3913 analysts.
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
Bernstein (Hold rating) has hiked its Micron (MU +5.9%) target by $1 to $11, and reports top rival Samsung's (OTC:SSNLF) DRAM supply growth is slowing. The firm forecasts the major DRAM oversupply situation that formed last year will turn into supply tightness by 2H17.
Bernstein's note follows April Samsung earnings call remarks suggesting the company will pare back its DRAM capacity growth. Likewise, SK Hynix forecast in April industry DRAM capex would drop in 2H16, and that the company would see DRAM shipments rise by a mid-teens % Q/Q in Q2.
Today's remarks are more positive than the ones Bernstein made last month, when it argued weak demand and Samsung's efforts to gain share would continue weighing on sales, and that the potential entry of Chinese firms into the memory market could act as a further headwind.
TrendForce recently estimated DRAM industry revenue fell 16.6% Q/Q in seasonally weak Q1 to $8.56B. Samsung was assigned a 46.4% share, SK Hynix a 27.1% share, and Micron an 18.5% share.
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
10-05-2016, 11:50 AM
(This post was last modified: 10-05-2016, 11:51 AM by admin.)
Results and guidance were pretty good..
By Tiernan Ray
Shares of DRAM and NAND memory-chip maker Micron Technology (MU) initially rose frationally in late trading, then gave up gains, after the company this afternoon beat fiscal Q4 expectations, and forecast this quarter’s results well above consensus.
Revenue in the three months ended in August rose 11%, quarter over quarter, to $3.22 billion, yielding a net loss of 5 cents a share, excluding some costs.
The Street had been modeling $3.16 billion and a 12-cent loss per share.
In a companion deck of slides, the company projected revenue this quarter in a range of $3.55 billion to $3.85 billion, and EPs of 13 cents to 21 cents. That is well above consensus for $3.46 billion and 9 cents per share.
CEO Mark Durcan said “We are seeing improving market conditions in terms of both slowing supply growth and improving demand across a number of key segments; in addition, we continue to execute on our key initiatives related to the deployment of advanced technologies and products to advantage our customers.”
Shares are down 15 cents, or 0.8%, at $17.65, in late trading.
Update: Among other details, the slides show that DRAM chip sales were made up 25% from mobile devices. Industry-wide, the company saw,
Improving market conditions driven by both supply and demand • 2017 industry bit supply growth in the mid to high teens % range. Long-term bit demand growth in the low to mid 20% range.
On the NAND side, it observed,
Improving market conditions driven by both supply and demand 2017 industry bit supply growth in the high 30% to low 40% range. Long-term bit demand growth in the low to mid 40% range.
Micron said it expects to spend $5 billion on capital expenditures on a “net basis” this fiscal year. Roughly half will be for DRAM production, 30% or so for “non-volatile memory,” and 15% to 25% for “technology/product enablement.”
Micron said that going forward it will exclude some items from its non-GAAP earnings to be consistent with other chip makers. For example, “Will exclude stock-based compensation expense and amortization of acquisition- related intangibles from non-GAAP results.”
Update 2: Micron stock is now down 50 cents, or 3%, at $17.30.
Update 3: Further tidbits: Of the compute market, Micron said “ Experienced accelerating revenue growth in a moderating pricing environment,” and especially the rise in shipments of chips on 20-nanometer process technology, and “Ongoing strength in graphics from GDDR5 and GDDR5-X products.”
Of the Mobile market, it said “Growth fueled by China market and smartphone memory content increases.”
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
Before that, DRAM and NAND maker Micron (MU) beat August quarter estimates and offered above-consensus guidance. The company is benefiting from both improving DRAM and NAND demand, and forecasts long-term annual NAND bit demand growth will be in the low-40s range. Industry data also points to burgeoning NAND demand. In October, prices for 64-gigabit (8GB) multi-level cell (MLC) NAND chips topped $3 for the first time in two years. Such a surge is unusual, as manufacturing process advances improve memory densities and lower per-gigabit production costs over time.
Strong Flash Memory Prices Are Good News for Some Firms, but a Mixed Blessing for Others - TheStreet
|
