- Micron (MU -1.5%) and SanDisk (SNDK -0.6%) finished down modestly after DRAM/NAND giant Samsung (SSNLF, SSNGY) posted decent Q3 numbers and offered an upbeat Q4 outlook (as expected) for its memory chip ops, and Goldman issued a cautious note about Q1 2014 memory pricing.
- Samsung's memory chip sales rose 12% Q/Q and 22% Y/Y in Q3. DRAM sales benefited from strong mobile demand, pending console refreshes, and healthy server DRAM sales.Wwhile global server sales have been under pressure, applications such as analytics apps and in-memory databases have buoyed server DRAM demand. NAND sales benefited from smartphone launches (i.e. the iPhone 5S/5C) and SSD growth.
- Samsung expects DRAM sales to remain strong in Q4 due to mobile/server demand and a favorable supply/demand balance (thanks in part to the SK Hynix fire). NAND demand is expected to remain healthy thanks to mobile/SSD-related orders.
- Goldman's James Schneider, who has Neutral ratings for both Micron and SanDisk (previous), has a near-term outlook similar to Samsung's. However, he also thinks there's "some risk" of NAND oversupply in 1H14, as DRAM production gets shifted to NAND, and expects DRAM prices to drop after SK Hynix's (HXSCL) production returns to normal.