Micron lower; BofA worried about pricing, Samsung/Hynix competition

|About: Micron Technology Inc. (MU)|By:, SA News Editor

"We disagree with the bullish consensus, as EPS growth is unlikely to be strong once it hits $2," writes BofA/Merrill's Simon Dong-je Woo, reiterating an Underperform on Micron (MU -1.1%).

Micron's huge rally leaves shares trading above BofA's memory up-cycle fair value target. In addition, Woo is worried about weakening chip prices (esp. for NAND flash), SK Hynix's (HXSCL) DRAM fab plans, "greater downside" to DRAM spot prices, and execution risk for new memory process deployments - he considers Micron's 20-30nm process tech inferior to Samsung (SSNLF) and Hynix's.

Earlier this week, Susquehanna downgraded Hynix, arguing Samsung has a technology edge. The firm noted Hynix is still using a 30nm DRAM process, whereas Samsung has made it to 25nm, and says checks suggest its migration to a 16nm NAND process (from a current 20nm process) might be pushed out to 2015.

Micron has forecast 16nm will account for a majority of its 2H NAND output. Samsung has an early lead on rivals in developing 3D NAND flash parts, but the technology is seeing a slow ramp.