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Micron Technology: Chips Ahoy!

Electric Phred profile picture
Electric Phred


  • For October DRAM contract prices were up an amazing 7-8%. Spot prices were up 14-17%.
  • NAND contract prices were flat to up 3%, with spot up about 1%.
  • DRAMeXchange's opaque mysterious DXI index continues to be up but opaque and mysterious. Some recent perturbations are examined under my low power cloudy microscope.

Like the gourmet delicacy mentioned in the title, DRAM contract pricing for October has been scrumptious and Micron Technology (NASDAQ:MU) will benefit mightily.

I'd been waiting for an update on contract prices for memory chips, as opposed to the spot market prices reported nightly on DRAMeXchange. Bernstein was the first research report I've seen with an update and they've included their usual excellent charts and commentary:

With Q4 contract price settled for tier-1 OEM, DRAM contract price rose over 7% sequentially MoM as supply shortage continues. DRAM spot prices continued to sizzle and rose over 17% for DDR3 and 14% for DDR4 in October. For NAND price, as the market moved to more balance environment, contract price for 32Gb MLC was up by 3% MoM while 64Gb and 128Gb stayed flat. Mainstream NAND spot prices were relatively stable (up 1% MoM) during October

DXI Index. I haven't seen anyone who can really make sense of DRAMexChange's DXI index from their paltry description or its squiggles; I can't either. But I track it because of its past excellent tracking with Micron's stock price.

As the calendar turned the page to November, the DXI plumeted 2.2% despite strong DRAM spot prices. Various theories have been advanced on my previous chip price article, such as a lag or a beginning of the month reset of some type. Or maybe DRAMeXchange is swapping different chip types in and out of the index at the beginning of the month? It would be nice if they told us. Here is the price action for the first day of the month for the past several months:

1st day change

average monthly

change per day

June 0% 0.38%
July 0.27% 0.44%
August -0.07% -0.03%
September 3.03%


October 7.01% 0.85%
November -2.22%

It certainly

This article was written by

Electric Phred profile picture
Have made bundles in rust belt. Have made-- and lost-- bundles in high tech. Former registered rep, business degree, doing vc and private company investments, while looking for stock picks on a regular basis.

Analyst’s Disclosure: I am/we are long MU, INTC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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