Summit Research: Micron Technology To Gain From Samsung Production Shift

Micron Technology, Inc. MU could get a lift from a rumor that competitor Samsung Ltd. SSNLF is cutting back production plans for memory chips in favor of large-scale integration devices.

"We expect this news to be positive for Micron Technology, since a DRAM competitor is now producing less DRAM," Summit Research analyst Srini Sundararajan said in a note.

Sundararajan reiterated a Buy rating and $50 price target on Micron, saying his information about Samsung is based on "channel checks."

Micron shares have repeatedly proven sensitive to chip production plans of Samsung. When the Korean manufacturer announced a $14.7 billion new semiconductor plant in South Korea in October, Micron shares fell 25 percent over a few days.

Sundararajan said Samsung's change in plans concerns its Line 17 chip factory.

Micron announced earlier Tuesday that its Chief Financial Officer, 64-year-old Ronald C. Foster will retire next year.

On Monday, activist investor David Einhorn's Greenlight Capital disclosed that during the third quarter it had cut its Micron stake nearly 25 percent to 30.5 million shares.

Micron traded recently at $33.05, up 2.3 percent.