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Micron Technology, Inc. (NASDAQ:MU) – Well Poised To Benefit The Gain Of Demand Supply Mismatch

Boston, MA 10/16/2013 (wallstreetpr) –

Micron Technology, Inc (NASDAQ:MU), is one of the leading players in the semi-conductor market. The company is involved in the manufacturing and marketing of semi-conductor devices. These devices are largely NAND Flash, DRAM, NOR Flash memory along with other technologies used for packaging solutions, and semi-conductor systems. These are used by various consumers, and in industrial and mobile products. Besides this, MU also manufactures components that are used in CMOS and various other semi-conductor device products.

MU recently acquired Elpida Memory, thereby making it the second largest memory manufacturer globally after Samsung. The acquisition of Elpida helped MU to gain a onetime gain in last quarter. Post the acquisition, it is believed that the company has now emerged as a very strong player in the DRAM sector.

Owing to the supply shortage, DRAM prices (DRAM processors are used in PC’s and laptops) are inching up due to strong demand. Supply of DRAM has been hampered on the back of production disruption at Hynix’s factories in China, which is expected to remain shut till the end of November 2013. Given the supply shortage, it is presumed that MU will stand to gain the market share and has them well poised to gain the benefits of the higher product prices.

After reporting a loss for seven consecutive quarters, the last quarter results exceeded street expectations. The improvement in the performance is also backed by the Elpida acquisition and MU’s internal operating efficiency. Due to the demand – supply mismatch for DRAM processors, the company was able to ride the benefits of higher DRAM processor prices, resulting in better revenue growth. Revenue in the last quarter increased from $1.96 billion to $2.84 billion, attributed to the higher DRAM prices.

It is believe that MU stands to benefit on the account of higher prices and stands to gain the market share, on account of the shortage of DRAM processors in the market.

Published by Ruchi Gupta

Swati Goyal has over 6 years of experience in financial research & analysis domain. She has built financial models varying from consumer goods to banks. She has her articles published in leading dailies of the nation

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