Micron Technology (MU) is having trouble holding the $30 a share level. After touching $32 a share a few times since June, the memory chip giant continues to trend in the value territory. The stock has a forward P/E of around five times. On Aug. 18, Micron said it will double its R&D facility in Boise, Idaho. The investment assures Micron as an attractive long-term investment.
Micron’s larger facility will develop memory and storage advances. Once completed, it will move the process to one of its many fabs world-wide for mass production. Today’s conditions are bullish for memory producers. The company benefits from strong demand and pricing for both DRAM and NAND materials. Applied Materials (AMAT) reported quarterly results that confirmed the health of the memory market. AMAT stock rose after it beat expectations and raised its outlook.
Per DRAM Exchange:
"DRAM revenue grew by nearly 17 percent and average selling prices (ASPs) for PC and server DRAM each increased by more than 10 percent sequentially during the second quarter. The ASP of mobile DRAM products increased by less than 5 percent, largely because many Chinese smartphone brands lowered their annual shipment targets, according to DRAMeXchange."
Source: http://www.eetimes.com/document.asp?doc_id=1332170
Average selling prices for PC and server memory (DRAM) is up over 10 percent. Samsung is adding to the positive dynamics of memory product profitability by raising DRAM prices. Even if demand falls in memory, which is unlikely, Micron and Samsung will still sustain high profit margins.
