Buy Signal on Micron Technology (MU-US)
Micron is a $65 Bn market cap, and specializes in the design, manufacturing of semiconductors. The group's products include memory products (dynamic memories, flash memories, etc.) and semiconductor systems. Revenues are split between 1/ IT infrastructure (43% of sales) including computers, network systems, graphics systems and cloud servers; 2/removable storage media (27% of sales) including USB sticks and floppy disks; 3/ phones and mobile devices (16% of sales), and others (14%) namely automotive, connected home and consumer electronics and industries markets.
Micron’s business is 75% DRAM and 25% NAND, with the vast majority of their profits coming from the DRAM business. The acquisition of Intel’s NAND will see SK Hynix leapfrog Japan's Kioxia and Western Digital into third place with a NAND market share of more than 23%. That leaves Micron at the bottom of the supplier share at 12%.
There is renewed strong momentum in memories, with strong traction expected to come from 5G, self driving cars and virtual-reality devices.
Short term catalyst: 5G, self driving cars.
This signal looks consistent with the Bullish momentum in the semiconductors sector.