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Micron, SanDisk tick lower following Samsung numbers, Goldman note

  • 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.
Comments (7)
  • Esekla
    , contributor
    Comments (2292) | Send Message
     
    I'd warned that MU was overbought going into earning in comments on this article: http://seekingalpha.co...

     

    Another bright spot for Samsung, besides memory, was that high end smartphone OLED panel sales increased. This is good news for Universal Display (OLED), especially since Samsung plans to "enhance market leadership" for OLED displays. See here for further commentary: http://seekingalpha.co...
    25 Oct 2013, 05:30 PM Reply Like
  • Tradestar
    , contributor
    Comments (309) | Send Message
     
    It is indeed curious that after Samsung had strong sales, and stated the opposite of what has been written about in the financial news, which is that Samsung saw an INCREASE in smartphone, mobile demand, etc., whereas financial writers/analysts have recently stated that there was a downturn in global demand for these same items.

     

    Something is askew here. MU and SNDK should have gone up. In MU's case, manipulation of the stock price is common, and was certainly in effect today, with large forces making certain it closed below $17, so $17 Calls would expire worthless.
    25 Oct 2013, 05:35 PM Reply Like
  • patt2374
    , contributor
    Comments (536) | Send Message
     
    Tradestar,

     

    "Something is askew here. MU and SNDK should have gone up. In MU's case, manipulation of the stock price is common, and was certainly in effect today, with large forces making certain it closed below $17, so $17 Calls would expire worthless."

     

    That is a pretty bold statement. Care to explain how this manipulation was played out under the ever watchful eyes of the SEC? (FYI- loads of sarcasm in that last sentence)
    25 Oct 2013, 06:53 PM Reply Like
  • Copious28
    , contributor
    Comments (368) | Send Message
     
    That's easy: special Goldman math was employed and even more special wording such as "risk", "oversupply", and "price drop". Look at analyst statements, particularly on option expiry dates and you will clearly see a correlation.
    Here an outlook that follows real logic: Hynix will have some challenges to getting the process up again and be delayed past March. This line was being converted to NAND, so the DRAM supply will stay the same as now. Prices will continue to stay high, just as they did with the flood in Thailand scenerio with hard disks. Oligopolies manage price. Even if someone were to want to build a new fab, its two-three years out, and $5B.
    26 Oct 2013, 09:16 AM Reply Like
  • Amerc96
    , contributor
    Comments (5) | Send Message
     
    Will Samsung quarter have any effect on INVN earnings on 10/29???
    26 Oct 2013, 01:03 PM Reply Like
  • Esekla
    , contributor
    Comments (2292) | Send Message
     
    @Amerc96: See commentary here http://seekingalpha.co... where I've been pretty consistently right about INVN movement.
    28 Oct 2013, 08:10 AM Reply Like
  • Copious28
    , contributor
    Comments (368) | Send Message
     
    Thanks to FredK for this:

     

    http://bit.ly/1c6Rsfs
    26 Oct 2013, 06:22 PM Reply Like
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