Micron Technology Inc.NASDAQ
Micron Technology: Given Future Potential, Patience Is A Virtue
Smart Value Investor • 69 Comments
Smart Value Investor • 69 Comments
Fri, Nov. 18, 7:54 AM
- In response to reports about talks between Changjiang Storage and Micron (NASDAQ:MU) on technology licensing and mass production of NAND flash memory, the Tsinghua unit made the following statement:
- Up to now, Changjiang Storage has never held negotiations with Micron and any other company on any topic. Vice Chairman Ding Wenwu has also never made any comment or released any information on this.
- MU -2% premarket
Wed, Jun. 8, 10:27 AM
- Micron's (MU -1.3%) deal to buy the 67% of Taiwanese DRAM maker Inotera it doesn't yet own (announced last December) is no longer expected to close in mid-July. Micron expects to provide an update on the deal's closing "toward the latter part of calendar 2016."
- Micron is paying $4B ($3.2B net of Inotera's cash and debt) to buy out JV partner Nanya's stake in Inotera. Micron is financing the deal, which is expected to yield manufacturing and cost efficiencies, via $2.5B in debt, up to $1B in stock, and cash on hand.
Dec. 14, 2015, 5:18 AM
- Micron Technology (NASDAQ:MU) has agreed to buy all the shares it doesn't already own in Inotera Memories, in a deal valued at $3.2B.
- "The acquisition is the culmination of a highly successful seven year partnership with Inotera," Chief Executive Mark Durcan said in a statement.
- Micron, which is expected to take on $2.5B of debt for the purchase, expects the deal to close in the middle of 2016.
Oct. 19, 2015, 4:42 PM
- Six days after reporting SanDisk (NASDAQ:SNDK) has talked with Micron (NASDAQ:MU) and Western Digital (NASDAQ:WDC) about a potential sale, Bloomberg reports SanDisk is in advanced sale talks with Western.
- Negotiations are said to have "accelerated" over the weekend. A deal could be reached as soon as this week.
- Western has been viewed by analysts as a smoother fit than Micron, given it's not currently a NAND flash manufacturer - with many thinking Western needs to become one to insure itself against hard drive cannibalization by SSDs - and SanDisk and Micron respectively having NAND alliances with Toshiba and Intel.
- SNDK +8.3% after hours. WDC -3.1%. MU -1.3%. Micron joined SanDisk in rallying last week following Bloomberg's original report, fueled by expectations a deal would improve Micron's NAND scale and IP, and potentially lead to more favorable industry pricing.
- Earlier today: SanDisk gains following Korean site's M&A report
Oct. 13, 2015, 5:07 PM
- Sources tell Bloomberg SanDisk (NASDAQ:SNDK) is in talks with Micron (NASDAQ:MU) and Western Digital (NASDAQ:WDC) about a possible acquisition. No decision has been made.
- Acquiring SanDisk, which partners closely with Toshiba (OTCPK:TOSBF) on NAND flash manufacturing, would turn Micron (NAND partnership with Intel) into a heavyweight within the NAND market - Samsung and SanDisk/Toshiba are currently the market's biggest players. Micron received 32% of its August quarter revenue from flash, and 60% from DRAM. The company has been betting on 3D NAND and 3D XPoint to strengthen its flash position.
- Western has made several smaller flash-related acquisitions, as it tries to offset the gradual encroachment of SSDs/flash storage on hard drives. However, none of the buyout targets were comparable in scale to SanDisk, and Western still depends on 3rd-party NAND suppliers who also compete with the company in the SSD market.
- SanDisk +11.5% after hours to $68.90. Micron +2.6% to $18.65. Western +0.8% to $85.00.
- Earlier: SanDisk jumps on reported sale effort
Oct. 13, 2015, 4:26 PM
- Bloomberg reports SanDisk (NASDAQ:SNDK) is working with a banker to explore a potential sale.
- SanDisk and (to a lesser extent) Micron (NASDAQ:MU) have risen after hours. Numerous chipmakers have been acquired over the last two years as the industry consolidates; SanDisk would be one of the biggest if a deal occurred.
- The chairman of China's Tsinghua Unigroup (previously bid for Micron) recently suggested his company wants to be a NAND flash manufacturer, but added it's uninterested in buying SanDisk, Toshiba, or SK Hynix (assuming regulators would allow it).
- Update: Bloomberg's sources state SanDisk has held buyout talks with Micron and Western Digital.
Oct. 5, 2015, 11:35 AM
- Micron (NASDAQ:MU) is now up 17% since beating FQ4 estimates and providing below-consensus (but perhaps better than feared) FQ1 guidance on Thursday afternoon. 27.8M shares have already been traded; the 3-month daily average is 33.3M.
- Micron is at its highest levels since early September, albeit still down 51% YTD. Shares go for 7.1x an FY17 (ends Aug. '17) EPS consensus of $2.43, down from $2.86 pre-earnings.
- Separately, Micron has bought Tidal Systems, a startup working on SSD controllers, for an undisclosed sum. Tidal employs well-known engineers hailing from leading controller vendor SandForce (now a part of Seagate), and claims to have developed superior compression and error-correction algorithms.
- The purchase comes as Micron gets set to ramp production of 3D NAND chips developed with Intel, as well as 16nm tri-level cell (TLC) meant to improve Micron's low-end/value segment positioning. A NAND alliance with Seagate was announced in February.
- In addition to SandForce, Marvell and Silicon Motion are major SSD controller suppliers. Intel, Samsung, and Toshiba are among the SSD vendors to have developed controllers for internal use.
- Last week's Micron coverage
Aug. 28, 2015, 3:20 AM
- Looking to revive a $23B takeover bid for Micron (NASDAQ:MU), the chairman of China's Tsinghua Unigroup traveled to the U.S. this week to meet with board members of the U.S. chipmaker, Reuters reports.
- Micron dismissed Unigroup's informal offer in July on the presumption U.S. authorities would block an acquisition due to national security concerns.
- Several politicians have also called for a rejection of a deal, citing Micron's role in making chips used in U.S weapons systems.
- Previously: Tsinghua still discussing deal with Micron (Jul. 23 2015)
- Previously: Micron reportedly doesn't consider Tsinghua deal feasible; shares -4.6% (Jul. 20 2015)
- Previously: Micron +11.6%; upgrades, skepticism arrive following buyout report (Jul. 14 2015)
- Previously: WSJ: China's Tsinghua Unigroup bids $21/share for Micron (Jul. 13 2015)
Jul. 23, 2015, 2:11 AM
- While it still hasn't had talks with U.S. regulators about a deal, China's Tsinghua Holdings has its eyes set on a potential $23B offer to buy Micron (NASDAQ:MU) and hopes the deal could eventually go through, the company's chairman told Reuters.
- Micron previously told Tsinghua its offer is not realistic because U.S. authorities would block the deal due to national security concerns.
Jul. 20, 2015, 1:06 PM
- A few days after John McCain and other politicians raised concerns (in response to a WSJ report) about a bid for Micron (NASDAQ:MU) by China's state-owned Tsinghua Unigroup, Reuters reports Micron has told Tsinghua it doesn't consider a deal possible "because U.S. authorities would block the deal due to national security concerns."
- The news service adds Tsinghua "had communicated its interest to Micron about an acquisition but had not presented a formal offer" as of the end of last week, and that Micron "has sought advice from an investment bank but has not officially hired one since it is not seriously considering Tsinghua's offer."
- Micron has sold off on a day the Nasdaq is up 0.3%. Shares are still up 9% from where they traded before the WSJ's report arrived. They're down 45% YTD.
- Prior Micron/Tsinghua coverage
Jul. 16, 2015, 2:58 AM
- More worries over a potential Chinese bid for Micron Technologies (NASDAQ:MU) (the last major American memory chip manufacturer) are surfacing.
- U.S. Senator John McCain, head of the Senate Armed Services Committee, has raised concerns about the potential national security implications of a proposed bid and called for a thorough U.S. review.
- Other lawmakers have also expressed their fears, given modern weapons' enormous dependence on computer chips and U.S. cyber attacks tied to Chinese hackers.
- Previously: Micron +11.6%; upgrades, skepticism arrive following buyout report (Jul. 14 2015)
Jul. 14, 2015, 3:00 PM
- Micron (NASDAQ:MU) is close to $20 following a WSJ report stating China's Tsinghua Unigroup is prepping a $23B ($21/share) bid. Credit Suisse has upgraded to Outperform, and Morgan Stanley and Drexel Hamilton to Neutral ratings.
- Not surprisingly, many analysts argue a much higher bid will be needed to win over management and/or are doubtful regulators would allow a Chinese company to buy Micron. UBS' Stephen Chin: “Valuation appears low as a potential $21 a share bid is 8.3 times fiscal year 2016 PE or low end of the historic range of 7 to 15 times whereas Micron’s stock was at $32 just 5 months ago.”
- Cowen's Tim Arcuri: "We think that the US DOJ would not allow this to happen given the increasingly strategic nature of DRAM to INTC and the US technology sector ... we do not completely rule out the possibility that China may have made this bid solely in order to show it remains committed to building a larger semiconductor industry despite the significant stock market correction in its domestic market."
- At the same time, Arcuri thinks Intel (NASDAQ:INTC) could potentially be interested in acquiring Micron, given the companies' NAND JV and Intel's "understanding of the growing importance of DRAM and NAND on its new Purley server platforms."
- Summit Research's Srini Sundarajan, who previously argued a Chinese firm could make a bid, thinks China is motivated by its massive DRAM spending - currently $13B, set to rise to $20B. Morgan Stanley's Joseph Moore, who downgraded ahead of Micron's earnings, now thinks a Tsinghua bid puts a floor on shares.
- NAND rival SanDisk is rallying amid hopes, it, too, could get a buyout offer.
Jul. 13, 2015, 8:14 PM
- State-owned Chinese tech firm Tsinghua Unigroup has prepped a $23B, or $21/share, bid to acquire U.S. DRAM/NAND flash giant Micron (NASDAQ:MU), the WSJ reports.
- The report has broken shortly after AH trading closed for the day. Odds are Micron rises sharply in premarket trading Tuesday morning. Shares closed today at $17.61.
- With Micron having started the year trading in the mid-30s - shares were still in the mid-20s a few weeks ago - there's a good chance management rejects the offer, which could prove to simply be an opening bid. If Micron agrees to a deal with Tsinghua, U.S. regulators are likely to closely scrutinize it.
- Of note: Micron NAND JV partner Intel (NASDAQ:INTC) has a 20% stake in a Tsinghua holding company that owns mobile chipmakers Spreadtrum and RDA Microelectronics, courtesy of a $1.5B investment made last year.
May 27, 2015, 3:00 PM
- Chip stocks are posting outsized gains (SOXX +4%) amid a 1.3% increase for the Nasdaq after the WSJ reported Avago and Broadcom are in advanced merger talks, sparking hopes for further M&A.
- A Broadcom/Avago deal would be worth ~$67B at current valuations, easily making it the largest in the chip industry's breathless consolidation wave. It would also touch markets ranging from smartphones to set-tops to servers to switches/routers.
- Notable gainers include Avago RF chip peers Skyworks (SWKS +4.3%), Qorvo (QRVO +3.2%), and Anadigics (ANAD +4.9%). Others include Micron (MU +3.8%), SanDisk (SNDK +4.3%), NXP (NXPI +3.5%), Silicon Motion (SIMO +8.3%), Cirrus Logic (CRUS +4.8%), STMicroelectronics, (STM +3.4%), Synaptics (SYNA +3.4%), Atmel (ATML +2.8%), Cavium (CAVM +4.5%), Intersil (ISIL +4.6%), Semtech (SMTC +3.9%), ON Semi (ON +3.8%), Microsemi (MSCC +4.4%), and IDT (IDTI +4.2%).
- Non-chipmakers tied to the industry are also doing well. Standouts include ARM (ARMH +4.4%), Amkor (AMKR +4.6%), ASML (ASML +3.1%), and Rambus (RMBS +3.3%).
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 1, 2013, 11:34 AM
- Intel (INTC +0.3%) is taking full control of an Israeli plant it has leased to Micron (MU +1.3%), and which is currently used to make NOR flash memory. Intel will hire 800 full-time employees and 200 contract workers currently on Micron's payroll.
- The chip giant had already expressed interest in taking over the plant, which was set to be shuttered in 2015, as well as in investing $10B to build a new Israeli fab and upgrade an existing facility.
- Though the Micron fab will continue making NOR flash for now (NOR demand has been declining), Intel wants to eventually use it to make 10nm CPUs. Intel is looking to begin shipping 10nm CPUs in 2015, though mass-production might not happen until 2016.
- Intel is reportedly looking for a $300M-$400M government grant to help pay for its investment. The company directly employs nearly 8K Israeli workers, and is indirectly responsible for many more.
- NOR flash vendor Spansion (CODE +4.4%) is rallying.
Aug. 15, 2013, 11:34 AM
- Intel (INTC -1.8%) has quietly acquired a U.S.-based Fujitsu unit that has developed a multimode 4G RF transceiver chip. Terms are undisclosed.
- The chip giant calls Fujitsu's transceiver "probably the most advanced multimode LTE RF transceiver available in the open market." It should complement Intel's 4G baseband chips, and compete with transceivers from Qualcomm (QCOM), Analog Devices (ADI), and others.
- Intel's Infineon mobile chip unit has been slow to roll out a multimode 4G baseband; Intel has promised phones featuring one will arrive early next year. In the meantime, Qualcomm controls a 90%+ share of the burgeoning 4G baseband market.
- Meanwhile, Baird's Tristan Gerra justifies his downgrades of Intel and Micron (MU -4.6%) by citing a litany of concerns stemming from an Asian trip. Gerra's findings point to "a below-seasonal outlook for the second-half, with recent reductions in PC order rates, continued weakness in smartphones, rising analog IC inventories at distributors," and the potential for DRAM supply to exceed demand.
- Micron recently forecast DRAM bit growth will remain muted in 2H and 2014, leading to a favorable supply/demand balance.