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Micron Technology (NASDAQ:MU) is in the process of a massive and rapid growth phase caused by recent and impending acquisitions. These acquisitions are not well understood, because the acquired companies are obscure or closely held. For the details of this extraordinary process, take a look at my previous explanation.

The end result of this will leave Micron as the second largest DRAM supplier behind Samsung and the second largest producer of 300mm silicon wafers, again behind only Samsung. According to Micron president Mark Adams at the recent Goldman Sachs Technology and Internet conference (12 minute point), subsequent to the new Inotera agreement and the acquisition of Elpida, Micron's total sales will increase 100% to $16 billion.

The $16 billion number is before the recent explosion in PC DRAM prices (as of today, 107% increase in spot price since December 3, 2012). It also does not include the recent strength in NAND flash prices. To finish the virtuous "perfect storm," Micron is in the process of ramping shrunken processes for both NAND and DRAM, which will reduce cost and increase margins.

Micron's exposure to PC DRAM is only about 15% as Micron, and perhaps 20% with the acquired capacity. PC DRAM has been selling at a negative 50% gross margin vs. a 40-50% gross margin for specialty DRAM and NAND memory. The recent PC DRAM spot price increases indicate the gross margins will be closing in on the non-PC memory margins.

So, starting with the total capacity of $16 billion at yesterday's prices, separate out the 20% PC DRAM business ($3.2 billion), triple the value to move it to the right margin. If we simply add the additional $6.4 billion due to PC DRAM price increases to the original $16 billion, we get a number like $22.4 billion run rate for total Micron revenue in a year timeframe. 40% gross margin gives nearly $9 billion in gross profit. Subtract $3 billion for total operating expense and Interest and using a 20% tax rate (actually zero for a long time), leaves $4.8 billion in net, after tax profits or about $4.80/share.

This doesn't give benefit to the cost reduction and output increases that are in process through the die size shrinks mentioned above. The big question is what multiple will Wall Street assign Micron. Another big question is when will Wall Street understand the rate at which this amazing transformation is happening.

I'm buying stock and a range of well out of the money call options with enough time for the story to "sink-in" on Wall Street. By watching DRAM and NAND memory prices on DRAMeXchange, I can sense any change in the above scenario in time for an orderly exit.

Disclosure: I am long MU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.