Micron Technology (MU) Business Update is an Incremental Positive - Needham

Needham & Company analyst Rajvindra Gill reiterated a Buy rating and $63.00 price target on Micron Technology (NASDAQ: MU) after the company hosted its May 12th business update. Management noted that its tool standardization across its DRAM fabs in the 1z nodes and beyond is over 85%, compared to 55-65% for 1x and 1y nodes and under 45% for the 20 nm node. Additionally, the company increased its FY20 captive assembly to over 60%, compared to ~45% in FY18. To further enhance its manufacturing productivity, quality, and yield, MU has been utilizing AI, image analysis, and IoT in its fabs.

The analyst stated "MU expects industry DRAM demand to grow at a mid-to-high-teens % CAGR from CY19 to CY23 and expects industry NAND demand to grow at a CAGR in the 30% range in this period. We expect MU to continue to benefit from strength in data center demand and the ongoing recovery in NAND and DRAM prices, which we expect to continue throughout 2020".

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Shares of Micron Technology closed at $45.99 yesterday.

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