Cleveland Research Maintained Long- term Optimism for Micron, SanDisk

On Thursday, Cleveland Research Company's analyst Kevin Rottinghaus published a report on his research on semiconductors, with a focus on Hynix, Micron MU, and SanDisk SNDK. A fire at Hynix's facility will continue to increase PC DRAM contract prices to possibly $35-38. Cleveland Research estimated that the October price will fall between $31-32. Rottinghaus reported, “Channel expectations are for Hynix not to fully recover until at least February with some suggesting it could take as long as September 2014.” Cleveland Research maintained their positive long- term outlook on Micron. The analyst based his outlook on Elpida integration and the expectation that “DRAM and NAND suppliers to balance supply and demand better going forward vs. historical.” The analyst reported an EPS of $3.00 plus in FY14 and expects $5B in earnings over the next two years. Rottinghaus noted that he remains cautious on SanDisk's 2H13 outlook “due to the softer industry trends and as the company is slightly more price aggressive as they are working through high inventories.” The analyst continued his long- term analysis based on NAND suppliers and the belief that SNDK “is well positioned to capitalize on growth in flash adoption in enterprise platforms.” On Thursday, MU closed at $17.48 and SNDK closed at $60.07.