"Assuming about 50K-to-100K of combined incremental capacity at Samsung's Line 17 Phase 1, Micron (lnotera/Rexchip), and SK Hynix, we expect industry DRAM wafer output to remain unchanged or decrease slightly in 2015, given tech migrations to 2Xnm and beyond result in 10% to 15% wafer output loss," Jefferies analysts said.
"We believe Samsung is preparing to add 14nm foundry capacity at S2 and S3 (Line 17 Phase 2) as needed to fulfill customer demand. We expect Micron's DRAM margins to remain biased upward in 2015," they added.
Separately, Nomura analysts said they "revise up 2015F DRAM market size by 17% plus year-over-year to $49.6 billion and 2015F NAND market size by 8.6% plus to $31.5 billion."
"We expect DRAM supply to remain tight, as bit growth of 25% will likely be in line with end demand. In addition, we are raising our Micron DRAM and NAND estimates on higher bit growth as strong mobile DRAM and server drive 20% to 25% demand bit growth," they noted.
"We are raising our CY15 DRAM estimate to $13 billion from $12.6 billion. Our MU DRAM growth estimate of 14% plus remains conservative relative to industry 17% plus year-over-year DRAM revenue growth due to lower bit production," they added.
Micron Technology is a global manufacturer and marketer of semiconductor devices, principally NAND Flash, DRAM and NOR Flash memory, as well as other memory technologies, packaging solutions and semiconductor systems for use in computing, consumer, networking, automotive, industrial, embedded and mobile products.
Separtely, TheStreet Ratings team rates MICRON TECHNOLOGY INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MICRON TECHNOLOGY INC (MU) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 48.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, MU's share price has jumped by 56.40%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MICRON TECHNOLOGY INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- 45.85% is the gross profit margin for MICRON TECHNOLOGY INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.20% is above that of the industry average.
- You can view the full analysis from the report here: MU Ratings Report