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

To: Sam who wrote (4038)	12/11/2018 12:00:14 PM
From: Art Bechhoefer	Respond to of 4827

Sam -- Citi's views on NAND pricing are certainly interesting, and probably somewhere in the ball park. But the comments fail to acknowledge changes in cost of production, and even assume production costs remain constant, quarter after quarter. Two things worth pointing out: 1. Micron, as far as I can determine, never had the low production costs developed by SanDisk and Toshiba, which, combined with the devaluation of the Japanese yen, made SanDisk, and now WDC, the low cost producers. 2. The advent of three and four bits per cell, and 3D architecture has provided at least an order of magnitude downward change in production costs, and WDC still appears to be even a lower cost producer than Samsung or SK Hynix, and certainly a lower cost producer than Micron. As the ASP for NAND drops, the impact on WDC may be a whole lot less than on Micron, Samsung, SK Hynix, or other competitors. What I can't determine from either the Citi comments or from other sources I've seen is whether the bottom has dropped out of the server market, as some are suggesting. When you see the humongous additions to cloud and enterprise servers, combined with relying less on hard drives and more on faster, energy saving solid state drives, it's hard to believe that demand in this market niche is dropping, or even stagnant. And when you consider the additional memory requirements for devices incorporating AI, I just find it hard to believe that the picture for WDC solid state devices is as bad as it may have become for Micron. Art