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Excerpt from our One Page Barron's Summary (receive it weekly by email by signing up here):

The Memory Glut of 2007 by Bill Alpert

Highlighted companies: Micron Technology Inc. (MU), QIMONDA AG ADS (QI), Microsoft Corp. (MSFT)
Summary: Since last summer PC makers have been urging computer buyers to stock new systems with plenty of DRAM in anticipation of Microsoft Corp.'s (MSFT) memory-intense Vista OS. Customers listened: average DRAM per PC went up to 1GB and spurred a major boost in DRAM sales, and Micron Technology MU 01 01 2007 Chart Qimonda 01 01 2007share prices have followed. But with new systems now selling with more than enough DRAM for Vista, the market may be hit with a chip-glut due to increased manufacturing capacity in Korea and Taiwan, and a reduction in transistor size that is increasing the bit-yield per wafer by 50%. Micron Technology Inc. (MU) shares are already down 33% from their summer highs on rising inventories and softening NAND flash demand, while other chip makers shares are still near their "Vista-ready" heights. Given 2007's potential for oversupply of both DRAM and NAND, Technology Trader Bill Alpert says it's no time to be chasing memory stocks.
Related: Micron's Net Up 200%, Beats Street, Sales Miss, But DRAM Demand Strong, Micron Facing A Tough Near Term Picture, Five Stocks For The Microsoft Vista Cycle, Micron Diversifying Away From DRAM Production, Micron Technology F4Q06 Earnings Conference Call

Source: Post-Vista Memory Glut: Stay Away from Chip Stocks