Micron Technology Inc. (MU): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Summary:
We are encouraged by Micron's strong second-quarter fiscal 2014 results as both the top and bottom lines increased year over year and surpassed the Zacks Consensus Estimate. The upside was driven by DRAM products, solid operational execution and the Elpida acquisition. Moreover, Micron is positive about its product launches and the growing demand for its products, particularly SSD products. The company is also optimistic about supply/demand balance for DRAM and NAND memory chips in 2014, which should support prices. While it may not be easy for Micron to capture share from SanDisk Corp., support from Apple and Intel its prime NAND customers will help Micron going forward. Thus, we initiate our coverage on Micron with an Outperform recommendation.

Overview:

Idaho-based Micron Technology MU is a provider of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets Dynamic Random Access Memory DRAM, NAND flash memory, CMOS image sensors, other semiconductor components and memory modules used in leading-edge computing, consumer, networking and mobile products. A major portion of the revenues is derived from DRAM sales. The company also provides CMOS image sensor solutions to the handset camera, digital still camera and PC video camera markets. On Dec 29, 2009, Micron voluntarily transferred its stock exchange listing from The New York Stock Exchange to the Nasdaq Global Select Market, a market of The NASDAQ OMX Group.

The company reports under four segments namely, DRAM Solutions Group DSG which includes DRAM products sold to the PC, consumer electronics, and networking and server markets NAND Solutions Group (NSG) which constitutes high-volume NAND Flash products sold into data storage, personal music players, and the high-density computing market Wireless Solutions Group (WSG) which deals with DRAM, NAND Flash and NOR Flash products, including multi-chip and Embedded Solutions Group (ESG) which includes DRAM, NAND Flash and NOR Flash products used in automotive and industrial applications, as well as NOR and NAND Flash sold to consumer electronics, networking, PC and server markets.

The bulk of revenues is generated in China, followed by the U.S., Asia Pacific (excluding China, Taiwan and Malaysia), Taiwan, Europe and Malaysia.

Micron competes with Samsung, Electronics Co., Ltd., SanDisk Corporation SK Hynix Inc., Spansion Inc. and Toshiba Corporation.

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