Micron (MU) has the other half of those NAND problems

Since Micron is the co-owner of the NAND joint venture with Intel, expect them to have a bit of nastiness in their results, too. It looks like Intel must've taken a significant write-off in NAND. I'm still trying to get some clarification.

Intel (INTC) lowers 1Q:2008 gross margin forecast

Guess what? NAND prices still suck. Intel lowers gross margin guidance due to NAND pricing. They have to be really bad to be hurting Intel that much since they're not a big chunk of business. Still hating Sandisk and memory capex plays here.

iSuppli sees weaker NAND market

iSuppli drops their NAND forecast from a silly prior forecast of 27% growth to a more reasonable (but probably still too high) single digit forecast. Most of the reduction is being blamed on Apple's weaker buy plans to suppliers.

I think the horse has been gone from the barn for a while here, guys. To be cutting the NAND forecast based on month old weakness at Apple is pretty lame. Not that it isn't correct... it's just late as hell.

Micron says inventories low, prices rising

At their analyst conference today, Micron indicated inventories in NAND are at 2 weeks and inventory in DRAM are at 3 weeks. They said inventories can't go much lower. They also said recent contract negotiations with PC manufacturers have gone well and they were able to raise prices.

Stock is bid up a bit. It probably has more room.

Sandisk cost accounting seems good... for them

I thought this was worth reprinting:

The resulting price falls halved Toshiba's operating margin in its chip business to 4.8 percent in October-December from 10 percent in the previous quarter, and cut the unit's profit by 60 percent.

Toshiba has a lot more moving parts but they're saying the margin degradation came primarily from NAND flash.

So Sandisk is injecting vast amounts of working capital into an off balance sheet JV (Flashvision, which they co-own with Toshiba) that's hurting Toshiba's results substantially and yet Sandisk reports pretty healthy product gross margins and profits.

I just don't think Sandisk's financial statements give a clear picture of the health of the company. They don't tell you what their real manufacturing costs are. I think it's a deceptive structure.

Memory fades further

Powerchip reported a gross margin of -71%. Last quarter it was -13%.

Promos cut capex substantially yesterday. Elpida followed today with a cut 25% below analyst expectations.

This article rehashes some of the other recent negative data points of the memory capex market.

I don't like the memory capex sector at all. Lam's guidance was far too optimistic. Varian, Lam, KLA Tencor, Mattson... all these stocks have a lot further to fall. Estimates are way too high.