SAN JOSE, Calif. - As reported, Micron Technology Inc. missed Wall Street's estimates for the quarter amid a DRAM downturn. Here's what analyst said about the results:
Analyst Doug Freedman of Gleacher & Co. (GLCH):
''Micron reported a 13-cent EPS miss in FQ1 driven by material DRAM and NAND pricing declines, which lead to significant gross margins degradation. GAAP EPS was $0.15, below GLCH estimate of $0.21 and consensus of $0.28. Additionally, our Feb. quarter estimates are only changed modestly to $2.05 billion/$0.02 verses prior $2.15 billion/$0.03.
NAND and DRAM contracts (~70-75 percent of memory revenue) continue to exhibit torrential pricing declines as we remind investors not to use spot market pricing to ascertain overall ASP trends. We continue to believe that DRAM pricing erosion could stabilize during 2H of FebQ at which point there should be greater confidence in modeling the top-line as the standard deviation across street estimates is
lowered reflecting a more balanced supply/demand environment.''
Analyst Hans Mosesmann of Raymond James & Associates:
In ''DRAM, management’s commentary on the market environment is consistent with market expectations with PC demand soft, servers relatively strong, wireless mixed (smartphones strong). Industry cap ex in 2011 set to decline with second/third tier DRAM players choosing to delay fab upgrades and/or seeking debt re-payment concessions. We enter 2011 in a classic DRAM bottoming process.
In NAND, ''commentary here included strong tablet and SSD trends (client and enterprise). Intel has effectively opted out of participating in the IMFS NAND fab build-out (as was widely expected), with Micron more than happy to take the full output of this capacity starting as early as mid-2011.
Our thesis for Micron is based on two powerful themes that converge in 2011: a classical bottoming process in the DRAM supply-cycle (cap ex down, no new fabs, and pricing bottoming); and a demand-related NAND flash cycle driven by tablets and SSD adoption instigated by the amazing success of Apple, which has changed the rules of the computing game going forward.''
I can remember DRAM / memory prices fluctuating quite significantly during the 1980s and for a number of decades (while I paid attention to sort of thing). I also remember how strongly the dollar / yen ratios affected a number of IC prices. Given the continued growth of devices that require memory, I would imagine that there will continue to be a need for reliable, low-cost memory devices of all kinds. One thing that I did not see addressed by the analysts is the effect on supply/demand that the world economy is having. That must be a most significant factor in memory prices and profits.
The market is really becoming very volatile, that is also true for memory, there are many different kind of memories going to come up now, TRAM, ZRAM, TTRAM, FeRAM, MRAM, PRAM, SONOS, NRAM and there might a few that I am missing, out of this it will always showing many ups and downs. Lets wait and watch...who lives and who...
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