Chas , I agree and also that they cannot be too positive because that might make Hynix more expensive.
Here is what Prudential writes about MU today (22nd march 02):
(Hans Mosesmann) No position in MU.
HIGHLIGHTS
** Micron delivered top line growth of 52% QoQ but missed our revenue estimate as production limited ability to meet stronger than expected demand. EPS came in at $(0.05) vs our $(0.12) estimate and FC cons. of $(0.04).
** The company appears to be hand to mouth entering May quarter with contract prices at $5+, lean channel inventories, the expected resumption of bit growth in the high teens for the May quarter.
** Concerns regarding reduction of memory content per box are over-blown, in our opinion as configurations for the consumer market appear sticky and corporate memory content/box is expected to increase to consumer levels as XP is adopted.
** Most intriguing take-away in our opinion is up-tick in server demand, with potential for some kind of pick-up in commercial, which is consistent with what Intel and others have seen in the past several weeks.
** With or without Hynix, we continue to believe that Micron is in an enviable position as a leader in this consolidating industry. Reiterate Buy rating. Raising estimates and price target to $55 from $50.
What strikes me most of the foregoing is the comment about being production limited. I do not quite understand where that comes from, but maybe some production lines are in conversion mode to 300 mm or just not having done enough wafer starts for the tail end of the quarter (I think the latter probably).
more .....
Micron Should Be In Good Shape With or Without Hynix. As the negotiations with Hynix drag on, we continue to believe that 1) time is on Micron’s side 2) Micron is in great shape with or without the acquisition of some of Hynix’s assets 3) industry consolidation will continue despite the eventual outcome of these talks, which we expect will be positive for Micron and positive for the industry. With Micron’s market position and cost structure set against the landscape of improving industry fundamentals, we believe that Micron is in quite an enviable place.
I will give some more in a following post.
Cheers
Cor |
