Can't predict stock price but looks like there are others that don't share the gloom and doom scenario
This board once again turned so bearish...
Strong Upside to Micron Shares Seen Through 2007
Mary Crane, 05.11.06, 3:26 PM ET
Micron Technology
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UBS analyst Alex Gauna said increased demand for dynamic random-access memory (DRAM) chips will boost Micron Technology's average selling price and provide upside potential through 2007.
Gauna raised his 2006 DRAM revenue forecast by 15% to $29.4 billion for Micron Technology (nyse: MU - news - people ), the world's second-largest semiconductor provider after Samsung Electronics and leading producer of DRAM chips.
Since hitting a low of $3.90 in December 2005, contract prices for DRAM chips have risen 37% to the current $5.30 level.
(this is actually not accurate - it only applies to 512Mbit (64Mbx8) DDR2-533)
This stronger-than-expected DRAM pricing and tight supply could extend through the middle of the year, Gauna said, given PC manufacturers' planned restocking. Micron Technology should also benefit from the launch of Advanced Micro Device's new processor, which is compatible with Micron's DRAM chip, the DDR2.
Gauna said that in the first half of May alone, DRAM chip contract prices rose 4%, and he expects continued chip supply constraints in May with further upside to prices in the second half of the year.
UBS now expects DRAM average selling prices to fall only 26% in 2006 and 21% in 2007 year-over-year, versus the historic average of 35%.
The analyst added that the DRAM market will likely remain undersupplied over the next 18 months, supporting average selling prices and driving DRAM sales above his firm's semiconductor industry forecast of 8% growth in 2006 and 10% growth in 2007.
Gauna maintained his "buy" rating on shares of Micron Technology and price target of $24. |
