Micron, SanDisk jump after OCZ warns of shortage
SAN FRANCISCO |
SAN FRANCISCO (Reuters) - Shares of chipmakers Micron (MU.O) and SanDisk (SNDK.O) surged on Thursday after a solid-state drive maker warned of component shortages, increasing expectations that production cutbacks are tightening the market for flash memory chips.
Shares of Boise, Idaho-based Micron jumped 7.59 percent to $6.66, and SanDisk surged 8.25 percent to $43.95.
Late on Wednesday, OCZ Technology Group Inc (OCZ.O) said it expected revenue for the second quarter to fall below its previous forecast because of a shortage of the NAND chips it uses to build storage devices.
Wall Street saw the outlook as new evidence that lower output by NAND manufacturers is reducing supply and helping stabilize low prices.
"Supply and demand is coming into balance with the cuts and the industry rationalizing its capacity," said Kevin Cassidy, an analyst at Stifel Nicolaus.
Reacting to surging sales of Apple's (AAPL.O) iPads, iPhones and other devices, chipmakers ramped up their NAND production capacity, but a supply glut drove prices to new lows this year.
Japan's Toshiba Corp (6502.T) announced in July that it would slash production of NAND memory chips by 30 percent, a move expected to bolster prices across the industry.
Low prices and steadily rising investment costs to implement new technologies have been driving consolidation in the highly competitive and cyclical memory chip industry.
(Editing by Leslie Adler)
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