Micron Low Market Valuation is not Justified Eyeing Protracted Computer Component Shortages
Chipmaker Micron’s stock could prove to be a strong catch-up trade as a recent WSJ article suggested “Western Digital in Advanced Talks to Merge With Kioxia in $20 Billion-Plus Deal”.
Chipmaker Micron’s stock could prove to be a strong catch-up trade as a recent WSJ article suggested “Western Digital in Advanced Talks to Merge With Kioxia in $20 Billion-Plus Deal”. Micron stock has been diving quite a bit over the last few months, owing to a fear the memory cycle may be over soon. However, the whole story about PC memory and microprocessor chip shortages is in sync for obvious reason, so with a “stellar balance sheet” and a sizable position in the computer chip market, Micron is poised to pop if demand for computers picks up, while trading just 7X its forward price-to-earnings multiple.
NAND-based solid-state drives are replacing traditional hard drives creating a growth opportunity for Micron. . Micron, the fifth largest manufacturer of NAND flash memory, first began shipping 176-layer NAND flash memory chips to customers in November 2020. Meanwhile, the industry leaders, Samsung Electronics and SK, have not yet mastered the serial production of such products, so Micron now has parity with Samsung in DRAM and NAND manufacturing process technology. In addition, in January, Micron was the first to announce the mass production of 4th generation 10nm DRAM.
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