Micron At A Three-And-A-Half-Year High This Morning

Over the weekend DRAMeXchange (a research firm that focuses on the supply/demand/pricing/outlook for DRAM chips) said that pricing for the chips remained firm to trending higher for this month.

Specifically, DRAMeXchange stated that the per-gigabyte price of DRAM memory chips for the PC sector averaged $0.85, flat with prices in the month of April.


For the server sector, the per-gigabyte price of DRAM memory was up eight-tenth of a percent to an average of $1.04 as compared to the price per unit in April. DRAM prices for servers increased for the 10th consecutive month.


The average gigabyte price of NAND flash memory chips stood at 5 cents, up 0.1 percent compared to the average price level a month ago.


Pricing this month remained strong across the board for DRAM/NAND chips despite the darksiders beating their chests and wailing "head for the hills" to whoever will listen,  as they have been doing since 2008-2009.


In addition, most semi-conductor analysts expect that the upward pricing strength, as a result of the imbalance between supply and demand, will continue going forward (skewed in favor of limited supply).


Also, over the weekend a Korean broker/dealer maintained its overweight rating on the sector saying that they expect chip pricing to continue to trend higher. I only mention this point because being Korea-based, they are at ground zero (so to speak) of the action.


Samsung also announced earlier today that it is considering adding more NAND capacity at its Xi'an, China plant amid surging industry sales, according to an article from Reuters this morning.


Morgan Stanley issued a report this morning that said that, according to their research, flash memory sales are ahead of their expectations and that supply of flash memory has been unable to keep up with demand from the cloud computing companies and a few PC OEMs. Most importantly, the analyst at Morgan Stanley expects flash memory pricing to rise through the end of 2017.


Late last week, Citi pretty much said similar things about pricing and demand (post earnings from HPQ) and reiterated their $45 per share price target.


Which leaves us with what should now be a familiar question, "Do we buy Micron here or do we buy it at higher levels?"


(Long mu calls)

Original Link
https://www.forbes.com/sites/jaysomaney/2017/05/30/micron-at-a-three-and-a-half-year-high-this-monring/#21c591233b4b