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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Chas who wrote (49336)	10/18/1999 11:35:00 AM
From: Glen2	Respond to of 53903

Dan Niles today wrote a new report on Micron. Details follow: 1. Contract prices heading toward $11. After seeing 64M DRAM prices average $5.20 in the August quarter, DRAM contract prices are currently all above $10.50 and are likely to see $11 over the next 1-2 weeks. To be conservative and account for lower September prices, we are modeling $9.25 for the November quarter. 2. Fully loaded costs for a 0.18u 64M are below $3.50 with 100% of Boise wafer starts expected to reach this milestone by November. In addition, we expect all of the foreign operations to reach full 0.21 wafer starts shortly thereafter. 3. Memory per PC driven by Win2000 should compensate for any PC unit demand shortfall. Current estimates for industry bit supply growth is about 65% for 1999 versus demand growth of about 80%. Given Micron's top 5 customers are forecasting bit demand growth of 120%, memory is likely to remain tight next year. We note that the recommended memory configuration for Win2000 is 128M versus a current desktop average of about 72. 4. We believe most PC vendors, even the majors, are still short DRAM components as witnessed by CPQ's statements to retailers last week. We have heard the situation is desperate at the white box vendors who can't afford to pay spot given the margin impact, (even if their was volume) but also can't get contract product. 5. We are raising estimates from $0.66 to $1.07 for Q1 (Nov) and from $4.25 to $5.05 for FY00. We believe that even these new estimates are conservative. We reiterate our Buy rating and year-end $100 and top of the cycle price target of $200.