Mighty Micron: Why 2015 Is Set to Be Another Breakout Year

Micron's prospective 3D NAND chip as well as Samsung's expected strong offering should serve to pressure SanDisk’s margins in 2015. Within the memory chip space, secular tailwinds favor the companies that offer DRAM solutions and are on the forefront of 3D NAND (Micron, Samsung), which is a superior technology to 2D NAND (SanDisk), offering better performance, higher density and lower cost per Gigabyte. Micron has fallen 17% over the past two weeks in response to mixed earnings and the startling weakness from SanDisk. It’s important to understand, however, that Micron and SanDisk operate on different playing fields. Micron is just months away from rolling out its cutting edge 3D NAND technology, which should elicit tremendous demand and elevate what's considered the industry standard. I am also bullish on mobile, which is expected to be a large driver of DRAM consumption as more phones utilize 4G and LTE data. DRAM is yet another technology that Micron has a leadership position in. With Micron trading at a 60% discount to SanDisk on a price to earnings basis, the selloff-induced entry point is extremely compelling.