Micron reported mixed first-quarter fiscal 2015 results wherein
bottom line surpassed the Zacks Consensus Estimate but the top line
missed the same. However, year-over-year revenues and earnings
compared favorably. The results were primarily boosted by improving
market conditions as well as an encouraging operating performance.
Also, better-than-expected demand for both DRAM and NAND
contributed to the overall revenue growth. However, Micron provided
tepid revenue guidance for the forthcoming quarter. Going forward,
the company is optimistic about supply/demand balance for DRAM and
NAND memory chips in 2015, which should support prices. However, it
may not be easy for Micron to capture share from SanDisk Corp. a
key NAND player. Thus, we reiterate our Outperform recommendation
for the stock.
Idaho-based Micron Technology (MU) is a provider of advanced
semiconductor solutions. Through its worldwide operations, Micron
manufactures and markets Dynamic Random Access Memory (DRAM), NAND
flash memory, CMOS image sensors, other semiconductor components
and memory modules used in leading-edge computing, consumer,
networking and mobile products. A major portion of the revenues is
derived from DRAM sales. The company also provides CMOS image
sensor solutions to the handset camera, digital still camera and PC
video camera markets. On Dec 29, 2009, Micron voluntarily
transferred its stock exchange listing from The New York Stock
Exchange to the Nasdaq Global Select Market, a market of The NASDAQ
The company used to report under four segments namely, DRAM
Solutions Group (DSG) which includes DRAM products sold to the PC,
consumer electronics, and networking and server markets NAND
Solutions Group (NSG) which constitutes high-volume NAND Flash
products sold into data storage, personal music players, and the
high-density computing market Wireless Solutions Group (WSG) which
deals with DRAM, NAND Flash and NOR Flash products, including
multi-chip and Embedded Solutions Group (ESG) which includes DRAM,
NAND Flash and NOR Flash products used in automotive and industrial
applications, as well as NOR and NAND Flash sold to consumer
electronics, networking, PC and server markets.
The company reorganized its business units in the third quarter
of 2014 into four reportable segments namely, Compute and
Networking Business Unit (CNBU) comprising of DRAM and NOR Flash
products that are sold to the computer, networking, graphics, and
cloud server markets, and NAND Flash products sold in the
networking market Storage Business Unit (SBU) accounts for the NAND
Flash components and Solid State Drives (SSDs) sold in enterprise
and client storage markets, and cloud and removable storage markets
Mobile Business Unit (MBU) comprise Micron's DRAM, NAND Flash, and
NOR Flash products that are sold to smartphone, feature phone, and
tablet mobile-device manufacturers. Embedded Business Unit (EBU)
which includes DRAM, NAND Flash and NOR Flash products from Micron
sold to automotive and industrial applications providers and other
consumer electronics manufacturers.
The bulk of revenues is generated in China, followed by the
U.S., Asia Pacific (excluding China, Taiwan and Malaysia), Taiwan,
Europe and Malaysia.
Micron competes with Samsung, Electronics Co., Ltd., SanDisk
Corporation SK Hynix Inc., Spansion Inc. and Toshiba
Micron Technology Inc. (MU): Read the Full Research
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