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Thursday, February 7, 2008

DRAM contract headed higher?

Scuttlebutt tells me you could see a double digit spike in DRAM contract prices. That will be interpreted positively for Micron. Much as I don't want to admit it, their outlook will be somewhat brighter than the stock price is telegraphing. It feels just wrong to say you should buy a PC component maker into seasonal weakness where the only reason prices are going up is the business is so painful the competition has resorted to massive capital spending cutbacks to survive.

As I stated in a piece yesterday, Micron will have a good story to tell in CMOS sensors (Nokia design wins) and they get some accounting benefit from the IM Flash division (the Lexar/Intel NAND business). Maybe it's worth a shot on the long side. Maybe a double digit hike in contract prices will look like a little sunshine coming their way.

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