Tag Archives: technology

Micron Downgraded Amid ‘Overly Optimistic’ Views Before Earnings

A Samsung-driven memory glut will pressure Micron Technology ’s ( MU ) top line, an ITG analyst wrote Tuesday as he estimated 11.5% and 10.6% sequential pricing plunges for DRAM (dynamic random-access memory) and Nand memory in Q3. ITG’s Mark Bachman cut his Q3 expectations on Micron sales to $3.03 billion vs. his earlier model for $3.1 billion, in line with company guidance but below broad Wall Street forecasts. The consensus of 33 analysts polled by Thomson Reuters sees $3.05 billion in sales, down 27%, and an eight-cent per-share loss ex items vs. 81 cents earnings per share in the year-earlier quarter. Micron stock was down 1.7% in midday trading on the stock market today , a day ahead of the company’s scheduled Q2 earnings results. Needham and Credit Suisse analysts also cut expectations Tuesday on Micron. Earlier this week, a Nomura analyst reiterated a reduce rating, the equivalent of a sell rating, on Micron stock. Like Bachman, Nomura’s Romit Shah sees DRAM (dynamic random-access memory) prices down in Q2 . Bachman expects Micron to report Q2 results in line with guidance but “would not be surprised if Micron guided revenue lower than the current consensus.” DRAM and Nand (flash) pricing declined 7% and 2%, respectively, in March, he wrote. “Pricing continues to deteriorate from continued weakness in the PC and mobile end markets,” he wrote in a research report. And Micron’s shift to a mobile focus isn’t paying off. Mobile sales fell 13% year over year in Q1. DRAM Pricing Struggles DRAM sales comprise the lion’s share of Micron’s sales but are deteriorating faster than Nand sales, Bachman wrote. Year over year, DRAM sales fell 37% in Q1, vs. a 5% decline in Nand. Flash memory pricing is more elastic, he noted. “As Nand prices fall, storage consumers increasingly substitute mechanical hard drives with Nand-based solutions,” he wrote. “While the market for DRAM is expanding, it is not a substitute for a relatively inferior good.” Sequentially, DRAM sales prices fell 4%, 10%, 7% and 13% over the last four quarters, Needham analyst Rajvindra Gill wrote in a report. Gill downgraded Micron stock to underperform from a hold rating. Gill sees consensus expectations for a 12% jump in fiscal 2017 sales as “overly optimistic,” considering a forecast 19% decline in fiscal 2016. For 2016 and 2017, Gill expects DRAM pricing to fall 30% and 14%, respectively, vs. a 13% decline both years in Nand prices. Credit Suisse analyst John Pitzer models a 10% sequential decline in Q3 DRAM pricing vs. earlier forecasts for a 5% decline. Pitzer rates Micron stock outperform and has a 20 price target. Pitzer expects a recovery in August and November on normal seasonality, cost reductions on Micron’s 20-nanometer ramp, the consolidation of Inotera, and optionality with 3D Nand and 3D X-Point in conjunction with Intel ( INTC ). Gill, on the other hand, says that Samsung’s tech is too far ahead for Micron to catch. “We believe Samsung remains well ahead and that by the time Micron has enough capacity on 3D to realize cost/bit benefit, Samsung will already have the ability to drive pricing down and largely negate Micron’s profitability progress,” he wrote.

Apple, Samsung Need Complex Chips, Antennas To Juggle Airwaves

Apple ( AAPL ), Samsung and other smartphone makers will need more advanced chips and antenna components as wireless service providers combine multiple radio-frequency bands to improve network capacity and data speeds, says a Citigroup report. AT&T ( T ), Verizon Communications ( VZ )and Sprint ( S ) are among the wireless firms turning to “carrier aggregation,” a term for combining two or more frequency bands to provide a single communications channel with more bandwidth. This juggling act requires more complex radio frequency chips, says Citigroup. It forecasts a growing market opportunity for chipmakers Qualcomm ( QCOM ), Broadcom ( AVGO ),  Skyworks Solutions ( SWKS ),   Qorvo ( QRVO ), Murata and others. Wireless firms are using carrier aggregation as mobile video traffic surges.  “Carrier aggregation is like adding more lanes to widen the highway and creating more space for more cars to travel on the highway at the same time,” says the report. While Apple designs its own antennas, there’s still a market opportunity for Amphenol and AAC Technologies to supply China-based smartphone brands, says Citigroup. Apple’s iPhone 6S series supports 23 frequency bands and the number is expected to keep growing in future devices, says Citigroup. Xiaomi’s new Mi 5 supports carrier aggregation to double its data download speeds, says the report. In the U.S., AT&T was the first to move to carrier aggregation for 4G LTE-A network upgrades, followed by Sprint and Verizon, analysts say. “According to Cisco ( CSCO ) (Systems), mobile data traffic is expected to grow more than 50% in the next five years,” said Citigroup. It expects more “world” phones to be built, with the ability to roam on 4G LTE networks as subscribers travel.

Questions Remain After Feds Quit Apple iPhone Hack Case

The Justice Department’s decision to withdraw its demand that Apple ( AAPL ) help it hack an iPhone in a criminal case is seen as a victory for civil liberties and data security. But the government’s actions late Monday raise a host of questions. The U.S. Department of Justice told a federal judge that it no longer needed to compel Apple to help unlock the password-protected iPhone 5C used by Syed Farook, one of the two now-deceased shooters in the San Bernardino, Calif., massacre. The DOJ said that the FBI was able to access data on the iPhone with the assistance of an unidentified outside party. Unanswered questions include: Who unlocked the iPhone for the FBI? How did they do it? Did they find anything useful for the investigation? Is data vulnerable on all iPhones because of the hack? Is the FBI telling the truth about the iPhone hack, or did it just want to back out of the court battle with Apple to save face? Will the feds pursue court action against Apple in other criminal cases? How will Congress address smartphone security amid law enforcement demands for access? “This case should never have been brought,” Apple said in a statement. “Apple believes deeply that people in the United States and around the world deserve data protection, security and privacy.” Apple said that a court order forcing it to write software to bypass its own security protections would have set a dangerous precedent. If it created a “back door” for the government, the data of all iPhone users would have been vulnerable to hackers, criminals and spies, the company said. A U.S. magistrate on Feb. 16 ordered Apple to assist the FBI in hacking Farook’s iPhone. Farook and his wife, Tashfeen Malik, shot and killed 14 people on Dec. 2. The radicalized Muslim couple, described in press reports as supporters of terror group ISIS, died in a gun battle with police. Fight for the Future, a digital rights group known for organizing online protests to support Internet freedoms, called the FBI’s decision to back down in the case a victory for the public. “Fortunately, Internet users mobilized quickly and powerfully to educate the public about the dangers of back doors, and together we forced the government to back down,” Evan Greer, campaign director of Fight for the Future, said in a statement. Image provided by Shutterstock .