Micron Technology stock falls on reported Samsung DRAM expansion

14 Jan

Flash memory card maker SanDisk’s recent move to trim its Q4 revenue forecast and Samsung’s reported plan to expand investment in DRAM caused the share prices of Micron Technology to tumble for three straight days, marking a three-month low.

Citing a report by securities brokerage firm Northland Securities, website SeekingAlpha said Micron Technology is set to take the heat following reports of Samsung’s plans to expand its DRAM facility and ramp up capacity.

Goldman Sachs previously warned that the memory chip industry could enter a new round of capacity competition. Micron Technology said in response last week that the industry is unlikely to repeat that mistake following several integrations and acquisitions. However, if Samsung is really going to expand its DRAM investment, DRAM chip prices could feel a downward pressure, even when market demand is stable.

According to Forbes, Micron Technology on Jan. 13 replaced pharmacy benefit management company Express Scripts to become the 20th most shorted Nasdaq 100 component.

Statistics compiled by Market research institute Statista show that Samsung accounted for 41.7 percent of the global DRAM business in Q3 last year, followed by SK Hynix’s 26.5 percent and Micron’s 23.7 percent.

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