Micron and DRAM: A ‘Minor Correction’ in 2019?
Chip-stock analysts continue to like what they are seeing in the area of memory chips, such as #DRAM. But there could be a bit of a correction at the beginning of next year, one warns. The main positive bit of news today is the report overnight of comments by Nanya Technology (2408TW), a DRAM producer that has just 3% of the industry’s total DRAM supply. Nanya said it is going to “expand its wafer bit output by 48%,” according to an analysis of the report by Cowen & Co.’s Karl Ackerman. That rate of growth of supply is more than twice the industry’s total expected increase in supply this year of 20%.
“The visceral reaction,” says Ackerman, “is that this heightens risk of oversupply for 2018.”
But hold on, writes Ackerman, total wafers of DRAM chips that Nanya puts in its factory will be just 5% of all the wafers produced by Nanya, and the other three DRAM makers, Micron Technology (MU), Samsung Electronics (005930KS) and SK Hynix(000660KS).
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