“I don’t think Apple (AAPL) [which uses Samsung flash chips in its iPod and iPhone] will use SanDisk or Micron parts, but other original equipment manufacturers are thinking about them as a second source,” he says.
What’s the significance from a stock perspective? Since flash memory chip prices began rebounding in June from extremely depressed prices in March, the stock of SanDisk has picked up, but not really in lock-step with flash memory prices. That suggests perhaps there’s more upside to SanDisk. NAND flash prices have increased 43% or so since their trough prices this year and spiked around July 25, notes Van Batenburg. SanDisk shares have meanwhile retreated about 6% in the last couple of weeks while flash memory prices were “breaking out.” Micron shares are down about 18% in that time.
The other question is whether the entire industry will benefit from Samsung’s shortfall, in the form of tightening supply and rising prices going into the fall. It’s too soon to tell, says Van Batenburg — “This industry is very fickle,” he opines, and supply can change fast. Analysts at market research firm iSuppli Friday afternoon chipped in their two sense, saying it’s too soon to predict any hard rise in prices this month because too much depends on how quickly Samsung turns the lights back on, and how quickly other manufacturers, such as third-place Hynix, based in South Korea, increase their own production.
Meantime, does the overnight disaster mean Apple will have a hard time shipping iPhones and iPods this holiday? Unclear, but Van Batenburg thinks some of the $5 drop in Apple shares today might be attributable to that concern, as I speculated earlier.
Shares of SanDisk today closed up 1.25% Fridayat $53.43, while Micron stock fell 1.52% to $11.64.