Digitimes reports Micron (MU +2.7%) will likely hike DRAM prices in May "due to low inventory levels in the supply chain and insufficient supply of memory chips from Samsung Electronics (SSNLF) and SK Hynix (HXSCL)"
Samsung is said to be dealing with low yields for its new 25nm DRAM process, leaving it unable to fulfill orders from PC OEMs, and Hynix's efforts to restart production at its fire-damaged Wuxi, China fab have reportedly been slowed by the installation of new machinery.
DRAM prices surged last year as industry consolidation, restrained capex, and strong mobile DRAM demand led to a favorable supply/demand balance. David Einhorn's bull case for Micron is based in large part on a belief consolidation will produce long-term changes in the industry supply and pricing dynamics.
Yesterday, Samsung reported Q1 memory (DRAM + NAND) sales of 6.29T won ($6.08B), -3% Q/Q (mobile seasonality) but +23% Y/Y. The company added PC DRAM demand is stabilizing, and that SSD and high-density memory card sales are boosting NAND demand.
Samsung expects a "balanced" DRAM supply/demand environment in 2014, and strong PC and data center SSD demand to fuel NAND growth.