The following excerpt is from NTAP earnings about two weeks ago. They are obviously a big customer of DRAM and NAND. They still see tightness in NAND and actually continuing until midyear which is WORSE than they originally expected. So either NTAP is lying or we have some pretty lazy analysts making assumptions based on seasonality. Or maybe things just totally drastically changed in the last 14 days but I doubt it. And if you have been in or following MU for any period of time, this is nothing. It just hasn't been this high in a while (17 years) so the absolute value of a drop of several dollars makes you forget that 10-20% drops in this stock's price for either stupid reasons or no reason at all happen all too often!
Timothy Patrick Long - BMO Capital Markets (United States)
Thank you. Could you talk a little bit about – you mentioned having adequate flash supply. Can you talk a little bit about what it's meant to the pricing of your products and the impacts on revenues and gross margins and how you see that evolving over the next year as the commodity comes more into supply/demand parity? Thank you.
Ronald J. Pasek - NetApp, Inc.
Yeah. We do have adequate supply for both SSDs and DRAM, by the way. Definitely more of a headwind on the DRAM pricing, that's definitely something everyone's suffering from right now, but moderated increases on SSDs. I think what we're seeing now is it's widely anticipated sometime in the first half of the next calendar year, we should see supply free up.
That slipped a little bit from what we thought before.. It looked like beginning of next year it will start to free up, but now it's delayed a little bit. So, at this point, it hasn't really affected either our gross margins or our revenue, and I don't anticipate that it will in the future.
As we said in the past, typically, what we've done when we've gotten commodity price increases is pass them on to customers, those increases. And by the same token, when we see those commodities decrease, we pass along the price decrease as well. |
