Micron Technology (MU)

[JLS]

In mid-November,

Micron announced it completed the flash fab expansion in Utah. It will output 3D XPoint, a non-volatile memory storage combination developed with Intel Corporation (NASDAQ:INTC). Though it will not yet add to revenue, Micron will keep defying investor expectations.

In Q4, revenue grew nicely, driven by all of its business units. In its Compute and Networking, Cloud, and Graphics segments, revenue improved. DDR4 production at 1X nm began, while the company sought qualification for TSV-stacked DDR4 products.

The Mobile unit showed even more impressive results. NAND and eMCP revenue nearly doubled from last year. Micron won its first qualification for 1X nm LPDRAM, 3D TLC eMCP and eMMC solutions.

Revenue from the Storage segment of Micron’s business rose 71% due to strong demand for SSDs. Not only are consumers buying these faster storage devices, but Enterprise customers are choosing the SATA 5100 SSD product.

Micron is not getting left out of the automotive computing market. Whereas Intel is invested in this market through its Mobileye unit, and Ambarella Inc (NASDAQ:AMBA) is developing CV1, Micron is ramping up 20 nm DDR and LPDDR. It also started sampling 1X nm DRAM in Q4.

Micron expects the under-supply of DRAM and NAND will lead to positive pricing and solid demand for 2017. It forecasts DRAM supply will grow by around 20%, and NAND supply will grow in the high 30% range.

In 2018, DRAM will continue to grow by 20%, but demand from cloud customers will keep the demand/supply balanced. This implies that investors should not expect any pricing deterioration.

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