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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc. -- Ignore unavailable to you. Want to Upgrade?

To: Unwelcomeguest who wrote (3685)	5/3/2018 10:56:45 AM
From: Art Bechhoefer	2 Recommendations Recommended By bigchad toastr Read Replies (3) \| Respond to of 4828

Apparently a large number of analysts and/or individuals treat WDC as if it were just another storage company, like Micron or Seagate. Apparently they ignore these attributes: 1. WDC has better gross margins on its solid state memory than ANY of its competitors, whether Micron, Samsung, Hynix, or Intel. 2. Better than expected demand growth in cloud and enterprise servers is explained by the difference in energy consumption between solid state and hard drives. The storage and retrieval requirements of cloud servers are so great that energy consumption becomes a significant factor, outweighing the lower cost of hard drives. That also explains why Qualcomm appears to be getting a foothold in the server market with its Centriq ARM based processors, which use about one-tenth the power of the standard Intel processors, and cost far less than the Intel processors as well. 3. Even though one could argue that a decline in the rate of growth for smartphones and small PC's has a negative impact on NAND flash memory, I think growth in cloud/enterprise SSD demand more than compensates. 4. A fire in one of the Samsung fabs has temporarily reduced supply capacity, helping to keep overall prices for solid state memory higher than expected. At some point, increased supply capacity may weaken prices, but that still does not apply at present. Apple, at its recent conference call, said that prices for memory may weaken or stay weak enough to enable Apple to maintain its industry high profit margins on smartphones. This view may have been intended to assure shareholders that they shouldn't sell their stock, but it may not be an accurate estimate of future NAND based memory pricing. In short, as some articles are now pointing out, for whatever reason, WDC appears to be underpriced. Whether it will recover to $100 or thereabouts depends more on the overall economy than on the well being of WDC from the point of view of its own revenue growth and gross margins. Art