Yesterday, 12:56 PM
- HP (HPQ +1.8%) and SanDisk (SNDK +2.4%) are partnering to develop a a memory technology they expect will be up to 1,000 times faster and offer up to 1,000 times as much endurance as NAND flash, while also providing "significant cost, power, density and persistence improvements over DRAM technologies."
- The solution will leverage HP's Memristor R&D investments - HP once promised memristors would enable computers that instantly turn on and off, and never lose data - as well as SanDisk's ReRAM R&D investments and broader manufacturing/design resources. Target server applications include "in-memory databases, real-time data analytics, [and] transactional and high-performance computing." HP also plans to use the technology with its futuristic Machine computing concept, in which memory and storage are one and the same.
- The announcement comes less than 3 months after Intel (NASDAQ:INTC) and Micron (NASDAQ:MU) unveiled 3D XPoint, a next-gen memory tech (commercial shipments in 2016) also promised to be up to 1,000 times faster than NAND and much cheaper/denser than DRAM, and which has much in common with ReRAM.
- HP and SanDisk are both rallying. The former could be getting a boost from reports Dell is in merger talks with EMC, thanks to hopes such a deal would lead the post-split HP Enterprise to receive M&A interest. The Nasdaq is down 1%.
- Separately, HP has rolled out a 34" Envy all-in-one PC (starts at $1,800), a 12" convertible (starts at $800), and a $429 Windows 10 tablet.
Mon, Oct. 5, 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
Fri, Oct. 2, 1:23 PM
- Micron (NASDAQ:MU) remains up strongly after beating FQ4 estimates and issuing soft FQ1 guidance against a backdrop of low expectations. NAND flash rival SanDisk (NASDAQ:SNDK) is also rallying.
- A slew of firms with Micron targets in the $20s or higher have cut them, while reiterating bullish ratings. Credit Suisse's John Pitzer (Outperform, target cut by $9 to $25) thinks the fact Micron is staying profitable during a downcycle trumps near-term negatives. "While we remain concerned with F2Q (Feb) – (1) seasonally weaker pricing, (2) mobile mix (72% of Op Profit) weakens post iPhone 6s builds, and (3) Company specific operational improvements still geared more toward F3Q (May) – we see trough EPS ABOVE break-even ... and SIGNIFICANT Company specific drivers in F3Q – full impact of 20 nm cost downs and Inotera pricing agreement. While fundamentals are not great, trough EPS above break- even would be definitive proof of a structurally better industry."
- Susquehanna's Mehdi Hosseini (Positive) offers a similar brand of cautious optimism. "Our expectation is for NAND ASP declines to exceed that of DRAM. However, if MU can execute on cost reductions ... we possess line-of-sight to a bottoming of margins in the Nov-Feb timeframe ... we believe the risk/reward profile remains favorable at current levels, as our “worst-case” EPS scenario (~$0.90-$1.00 in annual EPS), combined with a 10x P/E would suggest ~$4-$5 downside risk from current levels, while we view upside to our PT at $7-$8." Deutsche's Sidney Ho (Buy) thinks "potential capex cuts by memory suppliers (esp Samsung) should lead to better supply-demand next year."
- Nomura's Romit Shah (Neutral): "We continue to see the bottom in Feb-qtr, as we leave our seasonal decline unchanged -5% Q/Q vs. cons. of up slightly. We see stronger leverage in 2HF16 driven by more rationale supply (potentially helped by Samsung) and a more optimized cost structure in DRAM (mainly 20nm crossover) and NAND (TLC, XPoint)."
- On the earnings call (transcript), president Mark Adams stated mobile made up a low-30s % of DRAM revenue, PCs low-20s, servers low-to-mid 20s, and specialty DRAM (GPUs, autos, networking, etc.) low-20s. Consumer products (cards, USB drives, components) made up ~40% of trade non-volatile memory revenue, mobile low-20s, SSDs mid-teens, and embedded markets (autos, industrial, etc.) also mid-teens.
- Micron's FQ4 results, guidance/details
Thu, Oct. 1, 5:35 PM
Thu, Oct. 1, 4:30 PM
- While it beat FQ4 estimates, Micron (NASDAQ:MU) has guided on page 20 of in its earnings slides (.pdf) for FQ1 revenue of $3.35B-$3.6B and EPS of $0.20-$0.26, below a consensus of $3.74B and $0.38. However, much has been priced in over the last several months.
- FQ4 performance: DRAM bit shipments -1% Q/Q, ASP -7% (in-line with guidance), cost/bit +3%. Non-volatile memory (primarily NAND, with some NOR included) bit shipments -6%, ASP -1% (close to NAND ASP guidance), cost/bit -1%. DRAM was 60% of revenue, non-volatile memory 32%, and other 4%.
- Financials: Gross margin fell to 27% from 31% in FQ3 and 30% a year ago; FQ1 non-GAAP GM guidance is at 24.5%-27%. GAAP SG&A spend fell by $10M to $170M; R&D rose by $21M to $379M. Micron ended FQ4 with $5.6B in cash/marketable investments, and $7.3B in debt.
- The company states DRAM end-market demand is healthy in non-PC markets, and that NAND demand is relatively stable. "We expect the demand environment to stabilize and improve as we move through calendar 2016 ... We expect industry supply and demand for both DRAM and NAND to be relatively balanced in 2016."
- Shares have risen to $15.76 after hours.
- Micron's FQ4 beat, PR
Thu, Oct. 1, 4:07 PM
Wed, Sep. 30, 5:35 PM
Wed, Sep. 30, 10:49 AM
- DRAM/NAND flash giant Micron (NASDAQ:MU) and hard drive assembly maker Hutchinson (NASDAQ:HTCH) have joined Seagate and SanDisk in rallying strongly following news China's Unisplendour is buying a 15% stake in hard drive giant Western Digital at a 32% premium to Tuesday's close. The Nasdaq is up 2.1%.
- Also: Bloomberg reports touch controller/LCD driver/fingerprint sensor maker Synaptics rejected a $110/share buyout offer from a Chinese firm.
- Micron, of course, recently received buyout interest from China's Tsinghua Unigroup. Regulatory approval of a full-blown acquisition of Micron by a Chinese firm is considered unlikely, but hopes from an investment/partnership of some kind remain.
- Yesterday: Wells Fargo upgrades Micron ahead of earnings
Tue, Sep. 29, 9:28 AM
- Believing risk/reward is favorable following this year's plunge, Wells Fargo has upgraded Micron (NASDAQ:MU) to Outperform ahead of Thursday afternoon's FQ4 report. The firm has set a $16-$19 valuation range.
- MU +1.6% premarket to $14.28. Shares currently go for 7.4x an FY16 (ends Aug. '16) EPS consensus of $1.93 - down from $2.69 90 days ago, and below an FY15 consensus of $2.66.
- Micron fell hard yesterday as markets tumbled. Nomura and Cowen offered differing takes on whether FQ4 will act as a bottom for the company.
- Update: More details here. Wells' David Wong: "[W]e think that our $1.10 estimate for FY16 reflects a worse-than-average business environment which has been impacted by the rapid correction in DRAM prices over the last few months. These numbers suggest to us that our FY17 estimate of $1.80 might be a reasonable representation of Micron’s true normalized earnings power. Our valuation range is based on what we consider to be a modest multiple off this EPS estimate."
Mon, Sep. 28, 3:00 PM
- Plenty of high-beta tech names are getting clobbered as the Nasdaq posts a 3% drop amid a broad market selloff.
- Firms down over 5% include memory giant Micron (MU -5.6%), salvage auction site Liquidity Services (LQDT -10.5%), industrial measurement toolmaker Perceptron (PRCP -12.1%), cloud healthcare software provider Castlight (CSLT -5.4%), CDN owner Limelight (LLNW -8.6%), mortgage origination software firm Ellie Mae (ELLI -6.1%), ultracapacitor maker Maxwell (MXWL -8.5%), Korean analog/mixed-signal chipmaker MagnaChip (MX -9.3%), online loan marketplace LendingTree (TREE -7.9%), and online ad retargeting firm Criteo (CRTO -5.9%).
- Micron's decline comes ahead of its Thursday FQ4 report. Nomura predicted today FQ4 results will miss consensus, and that FQ1 will also be weak. "While an estimate cut is well understood, we believe Micron’s stock will continue to track DRAM/NAND pricing, which is trending lower into the peak of the build season.” Cowen, on the other hand, argued FQ4 will be the bottom, and stated checks point to Samsung "pulling back meaningfully on capex."
- See also: Solar stocks, GoPro, Mindbody, Qorvo
Mon, Sep. 28, 12:31 PM
- The Nasdaq is down 2.3%, but Intel (INTC +0.3%) remains up slightly. Possibly helping: Pac Crest's Mike McConnell (Overweight rating, $35 target) reports September notebook shipments appear set to top expectations by 5%-10%, that desktop motherboard makers are seeing improved demand from OEMs, and that server-related chip demand from cloud service providers is rebounding strongly following a recent slowdown.
- Citi and Wells Fargo argued PC demand is stabilizing earlier this month, while citing healthy August sales data from Taiwanese contract manufacturers. Windows 10 launched on July 29, and Intel began a large-scale rollout of its 14nm Skylake CPUs 4 weeks ago.
- PC sales expectations have been depressed: IDC estimates shipments fell 11.8% Y/Y in Q2 and 6.7% in Q1, and has forecast they'll drop 8.7% over the whole of 2015 to 281.6M.
- In other Intel news, Digitimes reports Intel, which has been looking to narrow its heavy mobile chip losses, plans to end price discounts (reportedly ~$4 for Windows tablets and ~$8 for Android tablets) for its 22nm Bay Trail Atom CPUs in October. Bay Trail CPUs are said to carry a list price of $12, and 14nm Cherry Trail Atom CPUs (discounted by $2-$3) a list price of $15.
- Related tickers: MSFT, AMD, NVDA, HPQ, MU, STX, WDC, HTCH
Fri, Sep. 18, 6:06 PM
- Micron (NASDAQ:MU) was among the hardest-hit tech large caps as the Nasdaq fell 1.4%, and the S&P 1.6%. 36.6M shares were traded, slightly above a 3-month daily average of 34.7M.
- No major news arrived today, but worries about DRAM pricing pressure continue to run high. TrendForce reported earlier this week the average price for DDR4 R-DIMM modules (widely used in servers) fell more than 15% in late August. NAND flash prices were also under pressure, dropping 6%-7%.
- One potential silver lining to lower server DRAM prices: They could add to the growing popularity of in-memory data-processing platforms such as SAP's Hana database and the Apache Spark in-memory big data engine.
- Summit Research's Srini Sundarajan, bullish the whole year, reiterated a Buy and $25 target today. He cites rising mobile DRAM content, Micron's 20nm DRAM ramp, a revised deal with Inotera, tri-level cell (TLC) NAND growth, and a belief Samsung won't "tank" DRAM prices while its mobile hardware ops struggle.
- Micron is now down 56% YTD. Shares go for 5.8x an FY15 (ended in August) EPS consensus of $2.68, and 7.1x an FY16 EPS consensus of $2.17. FQ4 results arrive on the afternoon of Oct. 1.
Mon, Sep. 14, 1:55 PM
- With the Philadelphia Semi Index (SOXX +0.4%) down ~20% from its June highs - an inventory correction and concerns about PC/smartphone sales have contributed - Evercore's C.J. Muse thinks "now is the time" to buy into the group. He sees 20%-25% potential upside over the next 3+ months, and 5%-10% potential downside.
- NXP (NASDAQ:NXPI), Micron (NASDAQ:MU), Analog Devices (NASDAQ:ADI), and Maxim (NASDAQ:MXIM) are Muse's top picks among chipmakers. Applied Materials (NASDAQ:AMAT), Lam Research (NASDAQ:LRCX) , and ASML are his top picks among chip equipment firms. Along with the call, Muse has upgraded Analog Devices (ADI +1.9%) to Buy.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
- Last week: Chip stocks jump as markets rally, Microchip improves guidance, Taiwan reports
Fri, Sep. 11, 7:09 PM
- "Taiwan notebook ODM shipments increased 16% MoM in August, above our Citi Asia Hardware Analyst William Yang’s estimate of up 10% MoM and above the three year average of up 6% MoM," writes Citi's Chris Danely, arguing PC demand is improving after a very rough Q1 and Q2.
- Danely adds Intel (NASDAQ:INTC) has "indicated PC demand appears to have bottomed, and PC OEMs have started to replenish inventory driven by the Skylake processor ramp," and that Micron (NASDAQ:MU) has "stated DRAM spot prices have started to stabilize, which the company believes is a sign of a bottom in the PC market." IT distributor Ingram Micro (NYSE:IM) is also said to be seeing stabilizing demand.
- Wells Fargo's David Wong sings a similar tune. "There have been signs of a seasonal pickup in PC builds. Month of August sales data reported by Taiwanese notebook and motherboard/computer makers shows a clear month-over-month lift in PC builds in August, and solid growth in the first two months of the September quarter compared to the first two months of the June quarter."
- Likely helping: Windows 10 (free upgrade to Windows 7/8 users) launched in late July to decent reviews, and Intel has since gradually rolled out its 14nm Skylake CPU line. After starting off by launching the gamer/enthusiast-focused Core i7-6700K and Core i5-6600K desktop CPUs, Intel has rolled out the Skylake Y-series (meant for tablets and compute sticks), U-series (ultrabooks/convertibles), H-series (notebooks), and S-series (desktops). Sizable power/efficiency and GPU performance gains are generally promised relative to comparable 14nm Broadwell CPUs.
- Related tickers: MSFT, AMD, NVDA, STX, WDC, HTCH
- Two months ago: IDC estimates PC shipments fell 11.8% Y/Y in Q2
Tue, Sep. 1, 9:13 AM
Mon, Aug. 31, 1:27 PM
- A few days after Reuters reported Tsinghua Unigroup's chairman visited the U.S. to meet with Micron (NASDAQ:MU) execs about its bid for the company, dealReporter states a partnership between Micron and the state-owned Chinese tech firm is possible.
- Unlike a full-blown acquisition of Micron, a partnership - perhaps involving Chinese DRAM/NAND manufacturing - might not face much regulatory opposition, while nonetheless allowing Micron to grow its Chinese sales and helping Beijing guarantee memory supplies for local OEMs.
- Micron is rallying on a day markets are off slightly. Close to 6% of the float was shorted as of Aug. 14.
- Prior Micron/Tsinghua coverage
MU vs. ETF Alternatives
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