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Micron (MU):5 Reasons to be Bearish

Oct. 07, 2010 12:49 PM ETMU
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1. Lexar, a Micron subsidiary, is up against a heavy buyer power in relation to NAND flash products that it distributes through retailing giants such as Wal-Mart (WMT).

2. In general Micron has heavy market competition in the digital market space with other big players such as SanDisk, Samsung, Elpida, and Hynix.

3. The acquisition of Numonyx is two fold as Micron is now exposed to the volatile commodity-like NOR flash memory market.

4.A prolonged cyclical imbalance in the DRAM market in terms of supply and demand has hurt Micron. It’s clear that the DRAM products are commodities in every way but name.

5. Micron operates in an industry where there is limited product differentiation which forces it to face difficult pricing competition.

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Summary:

We have no official buy or sell position on Micron (MU) but heavily encourage a positive discussion to see all points of view be they bullish, bearish, and or something else.

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