Memory chip makers are starting to become attractive, even as pessimism rises
The global memory market is weak and getting weaker, with investment firm J.P. Morgan expecting both bit shipments and average selling prices for dynamic random access memory, or DRAM, and NAND to see "meaningful" declines the rest of this year and next.
But with all of the pessimism surrounding both markets, the DRAM market is expected to only decline 7% this year and 5% in 2023, with mid-teens growth for the NAND market, leaving the total size of the memory market bigger than it's ever been.
And memory chip makers are starting to look attractive, J.P. Morgan said.
A team of analysts, led by JJ Park, noted that the memory market is likely to see a U-shaped recovery rather than a V-shaped one. As such, the firm sees the biggest beneficiaries as SK Hynix, Micron Technology (NASDAQ:MU) and Samsung (OTCPK:SSNLF) followed by Nanya Technology and Powertech. SK Hynix, Nanya Technology, Samsung (OTCPK:SSNLF) and Powertech don't trade on U.S. exchanges, but Micron (MU) has been beaten down this year, falling 36% since the start of the year, and more than 30% over the past six months.
However, Micron (MU) has started to see some investor interest, having gained more than 2% over the past month, despite the fact it issued a weak forecast for the fourth-quarter earlier this month, citing macroeconomic factors and supply chain constraints.
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