Needham Throws Wet Towel on Micron’s Hot Stock

Two thousand and sixteen has been a renaissance for semiconductor companies. Following years of underperformance and moribund stock action, the semis have come alive in 2016–all to do with easy compares, lower inventories and decent end user demand for electronics.

Micron has been the crown jewel of the rally, with shares rising more than 50% over the past 3 months.

Needham is out shitting on their parade path this morning, citing bloated inventories and a stupid as sin Digitimes article that wrongly praised Micron last week. Needham is intent on thrashing the shares of MU about the side of their boat this morning and there is nothing the illiterates from Digitimes can do about it.

Needham on Firday noted MU was up 3% on a Digitimes Article citing a “DRAM production slip-up has forced a Korea-based vendor to scrap 30,000-50,000 wafers from its 21nm node”. Based on their conversations with their supply chain contacts, they believe this claim is unsubstantiated. While it’s true that the DRAM pricing environment has improved, mainly driven by better PC DRAM pricing, they believe MU is sitting on a lot of excess inventory on its books and is having difficulty selling it, which could pressure gross margins. Moreover, as they discussed during their recent Asia trip, MU is still having qualification issues on its mobile DRAM 20nm product and is behind the competition. On the NAND side, MU has to cost-effectively transition to 3D NAND because it does not have a 14nm 2D NAND alternative, and here they remain cautious on that transition; Underperform.

Lots of hate in that research note. Maybe they need to chill for a minute and smoke some H to settle down.