CLSA Comments Further on Server DRAM Quality Issues (MU) (AMZN)

In a separate note, CLSA analyst Sanjeev Rana comments "We understand that Amazon is in now talks with Hynix/Micron on the possibility of additional server DRAM shipments if it can’t reach a settlement with SEC. Unlike SEC, Hynix/Micron’s 1x nm mainstream server DRAM products haven’t seen any issues so far and a deal with Amazon could help these two DRAM makers win share and reduce server DRAM inventory faster than expected. However, given Hynix/Micron’s limited capacity we believe in the long term Amazon will need to keep SEC as a supplier."

Further "Local media has recently highlighted the quality issues being faced by Amazon on its server DRAM chips sourced from Samsung Electronics (SEC). Although SEC citing customer confidentiality is yet to comment on this issue, our checks suggest that this has the potential to become a serious issue if not resolved properly, including future market share loss, customer refund or litigation."

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