Micron Technology, Inc. (NASDAQ:MU) is facing market pressures as recent reports by influential analyst, Nomura Agency, warns that DRAM and NAND sales are lagging. Reports are that Micron is under shipping DRAM chips as a result of its migration to server and mobile chips and away from PC’s. This is referred to as the 20nm conversion and is decreasing the DRAM output for 2015. Micron is slow to react to the industry change in demand that is driven by massive mobile and server demand. Servers and mobile devices operate using the NAND technology and the company has failed to react quickly enough to keep pace with Samsung.
The company is sampling LPDDR4 to OEMS but they will not be able to move them to production until late 2015. This might be too little, too late as Samsung has already sign mobile DRAM deals with OEMs including Apple and LG. The company is also behind on NAND deals as Samsung has already tested their 3-D NAND and has brought a three bit per cell version to market also. TLC is a technology that MU is falling behind in and they can’t afford to. The technology offers higher capacity and is being quickly driven into the mainstream.
Despite the obvious change in the direction of flash technology, Micron Technology, Inc. (NASDAQ:MU) failed to react quickly enough. TLC is only 10% of the company’s chip mix. Its competitors, Samsung, Toshiba and SanDisk are running levels of around 50-70%. 3-D NAND is another issue for MU. Samsung is way ahead in development and production of the technology that offers even faster speed combined with low energy requirements. MU is getting close to releasing their first 3-D product. Samsung is already working on their first and second generation versions. Not a good sign for future earnings.
The stock is losing ground quickly as it just had the short MA cross below the long MA. Its sitting at support and any more downward pressure could be critical.