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Friday, June 27, 2008

Micron (MU) pretty much in line, cuts capex

Micron reported. It was pretty much in line with expectations -- and the stock drops 10% anyway on NAND pricing concerns. Micron stated they believe chip dealers (yes, there is such a thing) are too long NAND and that inventory in the channel needs to come down and retail demand needs to pick up for there to be some kind of equilibrium in the market. DRAM was about on plan though their specialty DRAM business makes their sensitivity to pricing less significant and some may have looked for a bigger benefit. NAND units were up 40% with pricing down 20%.

They introduced a capex plan for 09 and its a doozy. They're saying they're going to spend $2.5 - $3.0 bil this year and 1.5 - 2.0 bil next. Sucks to be on the receiving end of that forecast if you're a semicap. Yet another reason to be negative on memory-heavy capex companies like LRCX, VSEA and MTSN.

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