Micron Technology Inc.
) seems well set on the growth path, given its positive earnings
surprise history and strong fundamentals. That's why the shares of
this memory chipmaker soared 135.1% over the last one year and
On an average, this Zacks Rank #1 (Strong Buy) stock's earnings
have outperformed the Zacks Consensus Estimate by 35.76% over the
last four quarters, making investors bullish on the stock. Strong
revenue growth (120.4% in first-quarter 2014 and 97.6% in
second-quarter 2014) also kept investors interested in the
The underlying driver is of course the favorable outlook for the
memory market that bodes well for the company's success.
The company is optimistic about supply/demand balance for DRAM
and NAND memory chips in 2014, which should support prices.
According to management, demand for DRAM and NAND is expected to
increase in the mid 20% to 30% and high 30% to low 40% ranges,
respectively, over the long term. We believe that this
supply/demand scenario is a positive for the company.
Micron is expected to benefit from the strong demand for NAND
flash-memory chips, used in smartphones and tablets. Driven by new
tablet products and greater adoption of solid state drive (SSD),
total demand in the NAND flash memory industry could surpass
manufacturing capacity, leading to periodic shortage and higher
pricing in the near term.
Furthermore, the Elpida acquisition has catapulted Micron to the
spot from the 10
in Gartner's 2013 list of Top 10 Semiconductor Vendors by Revenue,
Worldwide. This is because the Elpida acquisition expanded Micron's
wafer manufacturing capacity by approximately 45%. Moreover, the
acquisition of Elpida has added
) to its customer roster, which is a positive for future growth.
Going forward, the acquisitions of Rexchip and Elpida will benefit
Micron's share in the memory market.
Micron's innovations in memory technologies, spanning DRAM, NAND
and NOR Flash memory remain the growth catalysts, going forward.
These are being widely used in the latest mobile computing devices
as well as in consumer, networking and embedded products. Moreover,
we remain optimistic on Micron's SSD product launches that are in
great demand for their advantages over the traditional hard
While it may not be easy for Micron to take share from
) - a key player in the NAND segment, support from Apple and
), its prime NAND customers, could ultimately turn the situation in
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