Lau wrote in a note:
Our check and commentary from industry players point to a poor outlook for memory market in near term. Both DRAM and NAND markets are likely to experience significant ASP pressure during [the first half] due to excess capacity and a lack of a major catalyst to drive significant demand. Our checks also point to a slowing PC market in recent weeks and this could lead to weak DRAM demand in near term.
Lau says that big capacity additions in Flash has led to a “glut” in the NAND market; he sees capacity increasing 130% in 2007, with demand “likely to lag significantly.” He sees ASPs down 50%-60% in 2007, “worse than we had anticipated.”
Lau figures some of the NAND capacity will shift to DRAM production, due in part to Vista-driven demand.
Lau yesterday cut his price target on Micron to $15 from $21.
On Friday, Micron closed at $13.16.
Previously: SanDisk Swoons On Weak Q1 Outlook; Flash Prices Cratering (January 31, 2007)
MU 1-yr chart