Micron shares jumped 7.6% as Samsung cuts chip output.
The announcement by the world’s biggest memory chip maker follows Micron’s (ticker: MU) own cuts to production and capital expenditure. The second-largest memory chip maker SK Hynix (000660.South Korea) has also slashed capital expenditure for 2023.Citi analysts said Samsung’s (005930.South Korea) cut is a “huge positive” for the DRAM (dynamic random access memory) industry, noting that the South Korean company accounts for roughly half the entire market.
All the pieces are now in place for a recovery later in the year, they said in a note Monday, reiterating a Buy rating on Micron, with a target price of $75.
“When combined with Micron and Hynix’s production and capex cuts, [it] should help ensure a DRAM recovery beginning in the second half of 2023,” analysts, led by Christoper Danely said in a note Monday.
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