WDC, NAND, NVM, enterprise storage systems, etc. Message Board

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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.

SNDK 254.16

+4.3%

Nov 14 9:30 AM EST

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To: Unwelcomeguest who wrote (3952)	9/5/2018 1:59:31 PM
From: Art Bechhoefer	of 4827

Recent investment firm analyses appear to have overreacted to the notion that growth in NAND flash memory demand for smartphones is leveling off at a time when production capacity is increasing. The notion of oversupply, leading to lower NAND prices assumes that (1) oversupply is caused by slower growth in smartphone sales, and (2) costs remain fairly stable. Neither assumption is true. Smartphones are only one source of demand. Much faster growth appears to be from enterprise and cloud servers that are both adding capacity and switching from hard drives to at least a portion of their facilities using solid state devices. And higher density memory, using more 3D layers as well as four bits per cell, replacing some TLC or MLC, reduces costs. Thus, even if prices drop for some uses of flash memory, profit margins don't necessarily drop. WDC, meanwhile, has been reducing debt and/or refinancing at lower interest rates in a period of uniquely low interest rates. Taken together, these factors should lead to greater profits, margins, and ultimately, earnings per share. On this assumption, WDC shares have probably hit bottom and should reach somewhere in the high $60s or low $70s by year end. Beyond that, it's hard to predict because worldwide economic and political turmoil could bring the current bull market (already extended well beyond its average length) to a close. Art

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