Supply Chain Silver Lining: Samsung's Production Cut to Benefit Micron and Restore Balance, Say Analysts
Supply Chain Silver Lining: Samsung's Production Cut to Benefit Micron and Restore Balance, Say Analysts
Although near-term demand and pricing dynamics remain challenging, the analyst is encouraged by this long-awaited production cut as this will likely facilitate a quicker return to supply-demand balance and potential rebound.Mizuho analyst John Vinh reiterates an Overweight rating on $Micron Technology (MU.US)$ with a price target of $70.
$Samsung Electronics Co., Ltd. (SSNLF.US)$ reported during its preliminary 1Q23 earnings guidance on April 7, with 1Q revenue of 63 trillion KRW below consensus of 65.1 trillion KRW and EBIT of 0.6 trillion KRW below consensus of 1.41 trillion KRW.
With EBIT so negatively impacted, Samsung indicated it would cut memory chip production to a "meaningful level" and has reduced short-term production plans while continuing to invest in long-term infrastructure, e.g., cleanrooms, and to expand R&D.
Although near-term demand and pricing dynamics remain challenging, the analyst is encouraged by this long-awaited production cut as this will likely facilitate a quicker return to supply-demand balance and potential rebound.
It would also primarily remove investors' concern about irrational supply behavior and help regain confidence regarding disciplined Capex investments in memory.
Vinh views this announcement as positive for Micron.
Raymond James analyst Srini Pajjuri reiterates Outperform on Micron. The analyst's recent conversations in Asia suggested that Samsung previously targeted single-digit percent output reduction through line optimization.
The analyst writes that the new announcement brings production cuts to a 10-20% level in DRAM and NAND. While that is still smaller than some peer actions, it could have a more significant impact on near-term industry supply given Samsung's size (~45% share in DRAM, ~35% share in NAND).
In addition, Samsung's actions support his view that the company is not aggressively chasing market share (even though it appears to be maintaining its capex plans).
Pajjuri expects Samsung's cuts to accelerate Memory price recovery and is optimistic that the severity of the current downturn will lead to structurally better supply discipline in the industry.
Price Action: MU shares traded higher by 8.04% at $63.27 on the last check Monday.
瑞穗 分析师 John Vinh 重申了 “增持” 评级 $美光科技 (MU.US)$ 目标价为70美元。
$三星电子 (SSNLF.US)$ 在4月7日的23年第一季度初步收益指引中公布，第一季度收入比共识的65.1万亿韩元低63万亿韩元，息税前利润为0.6万亿韩元，比共识的1.41万亿韩元低0.6万亿韩元。
由于息税前利润受到如此严重的负面影响，三星表示将把存储芯片产量削减至 “有意义的水平”，并减少了短期生产计划，同时继续投资于洁净室等长期基础设施，并扩大研发。
尽管短期需求和定价动态仍然充满挑战，但期待已久的减产令分析师感到鼓舞，因为这可能会促进更快地恢复供需平衡和潜在的反弹。
它还将主要消除投资者对非理性供应行为的担忧，并有助于恢复人们对记忆中纪律严格的资本支出投资的信心。
Vinh认为这一宣布对美光来说是积极的。
雷蒙德·詹姆斯分析师斯里尼·帕朱里重申美光的跑赢大盘。这位分析师最近在亚洲的谈话表明，三星此前的目标是通过生产线优化降低个位数的百分比的产量。
分析师写道，新公告使DRAM和NAND的减产达到10-20％的水平。尽管这仍然小于一些同行行动，但考虑到三星的规模（在DRAM中占有约45％的份额，在NAND的份额约为35％），它可能会对短期行业供应产生更大的影响。
此外，三星的行动支持了他的观点，即该公司并没有积极追逐市场份额（尽管它似乎在维持资本支出计划）。
Pajjuri预计，三星的削减将加速内存价格的复苏，并乐观地认为，当前低迷的严重程度将导致该行业在结构上改善供应纪律。
价格走势： 周一的最后一张支票中，MU股价上涨了8.04％，至63.27美元。
