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Micron's In Trouble.
Quote:Micron's financial results have been declining steadily, and its woes culminated in its first loss in 12 quarters. Micron posted a $97 million net loss in the second quarter, which is a sizable decline ($303 million) in comparison to the net income of $206 million last quarter. Surprisingly, the loss represents a swing of over $1 billion in comparison to last year's second quarter $934 million net income.

Micron is feeling the pressure from the cratering mobile and desktop market, which led to reduced DRAM and NAND demand. The Average Selling Price (ASP) of DRAM declined by 10 percent, and the NAND ASP fell by 15 percent. Micron partially offset the declining NAND ASP with increased shipments, but it still suffered a six percent decline in volume.

Micron indicated that its saving grace will come from its aggressive 3D MLC and TLC NAND ramp, but the jury is still out on just how 3D NAND will save the day.

The price of a 256GB SSD was $125 last year but has fallen to sub-$85 this year, which is a decline of over 33 percent. Every week we see yet another statistic announcing that SSDs are replacing HDDs at ever-increasing rates, but it does not appear that anyone is making money from it.

There is not enough SSD demand (and apparently too much supply) to sustain healthy margins, and how the addition of cheaper and denser 3D NAND fixes the problem is anyone’s guess. 3D NAND is ostensibly cheaper to produce, but will likely just touch off another price war.
Quote:Micron filed a form 8-A with the SEC that invokes a rights issue that is triggered if any sole entity, such as a person or group, were to buy more than 4.99 percent of its shares. The market commonly refers to the technique as a "poison pill," as companies typically use it to avoid an unwelcome takeover attempt. The move has spurred widespread conjecture that Micron is under duress and about to be bought out, which makes sense considering the recent market consolidation.

There are several theories as to the identity of the potential suitor, but some seem more probable than others. The promise of a NAND fab is that it provides the ultimate low-cost advantage, along with engineering and time-to-market advantages, which breeds plenty of interest. Apple is the single largest NAND consumer in the world, and purchasing its own fab would put it on equal footing to its NAND fab-powered rival Samsung.

Intel also might be interested, as Micron has the option to buy out Intel's stake in their IMFT partnership in 2018. Seagate is also a commonly-named potential suitor, largely because it needs to counter WD's purchase of SanDisk. However, even though Seagate and Micron already have a strategic alliance, Seagate also has plenty of financial woes, which reduces the likelihood (but I still think its likely).

The Chinese government and its long-tentacled state-controlled Tsinghua Unigroup corporation are among the most likely to attempt to buy a majority stake of Micron, and they have already been busy.

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