Micron (MU) and Intel (INTC) Could Announce Closer Relationship at Tomorrow's Event - Susquehanna

Micron Technology (NASDAQ: MU) was in focus Monday on news it plans to hold a joint conference with Intel (NASDAQ: INTC) tomorrow. In the view of analyst Mehdi
Hosseini of Susquehanna, the two hold joint webcasts on a regular basis, but tomorrow "could possibly be different."

"We remind investors that since Analyst Day last November, Intel has become more vocal about the opportunities 3D NAND presents. Micron, on the other hand, is planning for 3D NAND volume manufacturing at its Singapore fab starting sometime in 2H16. Since Intel's JV with Micron (IM Flash-IMF) only includes the Utah fab and NOT Singapore, we do not rule out some form of closer relationship between Micron and Intel and to be announced tomorrow - to better safeguard supply of NAND (from Micron into Intel)," said Hosseini.

"... we believe tomorrow's announcement could include some element of funding and/or closer collaboration b/w Micron and Intel in scaling Micron's 3D NAND technology," continued the analyst. "We remind investors that Micron is currently expanding its clean room facilities in Singapore, with the intention of having their pilot line there to produce 48 layer 3D NAND, and is aimed at turning into high volume manufacturing (of 3D NAND Tech) by 2H16. However, the Singapore fab is NOT part of the IM Flash JV (between Micron and Intel). The IMF ONLY includes the Utah fab in the U.S. We also remind investors that Intel helps MU with NAND technology and in return buys the NAND wafers manufactured in Utah at cost. Thus, any wafers manufactured out of Singapore are outside of the IMF agreement and thus would require Intel to pay a premium. Additionally, we note MU also has an alliance with Seagate (announced in Feb), which makes it interesting to say the least, as it is uncertain who will get priority with 3D NAND wafers manufactured in Singapore."

Susquehanna has a Positive rating on Micron Technology with a price target of $28.

For an analyst ratings summary and ratings history on Micron Technology click here. For more ratings news on Micron Technology click here.

Shares of Micron Technology closed at $18.34 yesterday.

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