Seeking Alpha

Report: NAND prices rising, MU focused on SSDs, SNDK gets iPhone orders

  • NAND flash contract prices rose 2%-4% in the first half of June, and are set to keep rising in Q3 thanks to orders from Apple (bigger iPhones expected), Chinese smartphone OEMs, and SSD vendors, industry sources tell Digitimes.
  • But in spite of strong demand, Micron (MU) is said to be cutting NAND sales to third parties, as it dedicates more output to its Crucial SSD line. Micron, estimated by Gartner to be the #4 SSD vendor in 2013 (behind Samsung, Intel, and SanDisk) reportedly wants to double Crucial shipments Q/Q amid strong market demand.
  • Meanwhile, Digitimes reports SanDisk (SNDK) has received major orders from Apple for its upcoming iPhones. Rival SK Hynix (HXSCL) has received smaller orders.
  • Micron and SanDisk have already been making new highs on enthusiasm about favorable NAND and (in Micron's case) DRAM supply/demand balances.
Comments (18)
  • Jaret Wilson
    , contributor
    Comments (859) | Send Message
     
    If they actually manage to double Crucial SSD shipments Q/Q, that should affect the view of some of the recent NAND naysayers.
    18 Jun, 06:44 PM Reply Like
  • William Tidwell
    , contributor
    Comments (334) | Send Message
     
    Jaret,

     

    One thing I've got to give Durcan - he at least has the courage to commit to a strategy and stick to it. Sounds like he's doubling down on moving their NAND production to the higher margin opportunity in SSD's.

     

    Two observations - first, my model for NAND in Q3 looks about right with big revenue reductions from reduced shipments. Second, Q4 has a major risk factor in the NAND leverage - Durcan better be able to sell those SSD's at high margins!
    19 Jun, 08:07 AM Reply Like
  • Jaret Wilson
    , contributor
    Comments (859) | Send Message
     
    William,
    Risk factor? I don't see how moving from commodity memory cards to SSDs can be anything but an improvement. If it wasn't, they wouldn't do it.
    19 Jun, 08:46 AM Reply Like
  • Arizona Lefty
    , contributor
    Comments (113) | Send Message
     
    Jaret,

     

    Totally agree. Consumer SSD may not have the margins of enterprise SSD, but selling SSD of any sort sure has better margin than selling chips or commodity cards. What I am hoping to see this year is a teardown of a laptop from a major brand that reveals a Micron SSD inside.

     

    The "double shipments" part of this report seems to line up with my thesis about MX100 signaling a significant shift in Micron strategy with respect to SSD, from enterprise to consumer. At least for the six to eight quarters Durcan recently intimated it would take to catch up. <g>

     

    And, as to that statement, I will be fascinated to see (in the 3Q CC) whether Durcan offers more elaboration after further reflection and following Tidwell's "Coming Clean" article on the statement, and Electric Phred's confession to being "rattled" by the statement.
    19 Jun, 02:27 PM Reply Like
  • William Tidwell
    , contributor
    Comments (334) | Send Message
     
    Jaret,

     

    The risk is being able to sell the SSD's in enough volume to move the needle. Samsung and SanDisk have strong positions with the OEM's right now and will fight to keep share. Sure Micron will sell a few but can they sell a lot? It's one thing to get some orders from an OEM when they have a dominant supplier that they would like to be less dependent on - it's an entirely different thing to come in and sell as a number three alternative. Possible but very difficult in my experience.
    20 Jun, 11:25 AM Reply Like
  • William Tidwell
    , contributor
    Comments (334) | Send Message
     
    Lefty,

     

    Me too regarding Q3 commentary!
    20 Jun, 11:26 AM Reply Like
  • Jaret Wilson
    , contributor
    Comments (859) | Send Message
     
    William,
    Will they move a lot the first quarter? Maybe not. No reason they shouldn't within a few quarters though.

     

    Let's be clear here: Micron is the biggest seller of memory _in the world_. Bigger than Samsung, because Samsung keeps so much of its own production. They may be smaller in SSDs, but they have the customer relationships already.

     

    How about this for a sales tactic, "How much DRAM do you want to buy from us this month? Oh you want that much? It's in shortage you know...we'll look and see what we have, but first, how many SSDs are you buying to go with your DRAM order? None? ...then it seems we're out of DRAM right now." [though a bit more subtle than that perhaps]
    20 Jun, 01:03 PM Reply Like
  • i_am_seeker_2
    , contributor
    Comments (496) | Send Message
     
    And people have been yakking about NAND over supply, lol.

     

    That isn't going to happen for years. SSDs will eat up supply like a ravenous football team at a steak house. Like a whale scooping up shrimp in the ocean. Like a bear eating honey from a bee hive.

     

    You get the idea....
    18 Jun, 07:11 PM Reply Like
  • MrMatt
    , contributor
    Comments (1304) | Send Message
     
    I upgraded to an SSD, it's awesome.
    18 Jun, 07:57 PM Reply Like
  • cooples03
    , contributor
    Comments (70) | Send Message
     
    was it Crucial?...
    18 Jun, 11:31 PM Reply Like
  • Jaret Wilson
    , contributor
    Comments (859) | Send Message
     
    Seeker,

     

    I'm glad you stopped before the dung beetle analogy.
    19 Jun, 12:43 AM Reply Like
  • StockMover
    , contributor
    Comments (23) | Send Message
     
    Jaret or Seeker, the report doesn't say anything about Micron supplying Apple? Are they still a supplier? Nice to see the SSD news.
    19 Jun, 01:35 AM Reply Like
  • Jaret Wilson
    , contributor
    Comments (859) | Send Message
     
    StockMover, Micron is almost certainly a supplier of mobile DRAM for Apple, but not NAND. That's how it's been in the past, and likely will continue that way. It doesn't matter much one way or the other though -- in a shortage one customer is as good as another.
    19 Jun, 02:05 AM Reply Like
  • PeteCal
    , contributor
    Comments (90) | Send Message
     
    So, what happens to Seagate etal?
    19 Jun, 08:54 AM Reply Like
  • jarhead999
    , contributor
    Comments (16) | Send Message
     
    Better buy a hard drive now, don't use it, tuck it away.. will become a collectable in few years..
    19 Jun, 11:10 AM Reply Like
  • Doc's Trading
    , contributor
    Comments (906) | Send Message
     
    MU.... Lower buy stop on short sale taken at 31.17 from 32.47 to 31.97.Expect a Monday decline unless earnings come in way over estimates.
    more later...
    20 Jun, 12:47 PM Reply Like
  • Pollos Hermanos
    , contributor
    Comments (28) | Send Message
     
    More later... Monday decline unless earnings way over estimates

     

    Wow, great insight, and if they miss and give a weak guidance the stock will decline big ? Really ?

     

    More later, ridiclous comments, keep them coming...
    20 Jun, 02:29 PM Reply Like
  • i_am_seeker_2
    , contributor
    Comments (496) | Send Message
     
    Well, I added more July calls this morning. Not leaving much time, but I expect a good report and good guidance. Even if the stock is over bought right now--this move has been so powerful that it can always get even more overbought, just as it was way way oversold two years ago.

     

    Cliche alert--Time will tell!
    20 Jun, 03:12 PM Reply Like
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