Todor Pichurov

Micron Technology, Inc. (NASDAQ:MU) Sees Light At the End of the Tunnel, Still Optimistic About Elpida Acquisition

by Todor Pichurov October 15, 2012
2MU_chart.pngThe semiconductor industry is in a hole. Micron Technology, Inc. (NASDAQ:MU, MU message board) is another name that rode the water slide of the crisis, but management thinks the situation is about to improve, at least for the makers of memory chips.

Mark Durcan, CEO of Micron, voiced his belief that the accumulated oversupply of memory products has been thinned out enough to stabilize prices. Durcan explained the problem as more of a short term issue that would fix itself soon. Part of the problem, in addition to the slump in prices due to the oversupply, is the unusually slow market ahead of the holiday season - a time when demand should gradually increase.

In their earnings report from September 27, Micron cited a widening gap in net loss and Q4 revenue slipping by 8.3%. Phone NAND memory sales reportedly went down 5% in Q4 and this dealt an additional blow to the company.

Durcan also stated his belief that the Micron proposed acquisition of Japan's largest and now bankrupt chipmaker, Elpida Inc., is going to close successfully in early 2013. The deal was vehemently opposed by a group of Elpida bondholders who took the case to court, proposing an alternative solution to revive Elpida, involving a loan. Durcan considers Micron's proposal the best possible for Elpida and the bondholders - "crazy" to try to prevent the $2.5 billion acquisition.

The acquisition will be largely beneficial to Micron as well, naturally, boosting their production capacity by almost 50% and giving MU greater supply flexibility and a better competitive edge to tackle rivals like Samsung and SanDisk Corporation (NASDAQ:SNDK).

Micron closed nearly 1.4% down on Friday, losing 8 cents of its share price and settling at $5.67.

IMPORTANT MICRON UPDATE: October 15th 2012 - MU is making a chart pattern that has been seen 86 times since the year 2000.  55.81% of the stocks that have made this pattern went down over 8% on average in a 20 day period.  Watch the video to learn more about the probabilities of MU stock moving up or down.

MU Backtested Performance
                                                                                                 >>Click here to watch the video and learn more

Comments 0

Type the characters that you see in the box (5 characters).