AmTech Upgrades MU, SNDK; Sees Memory Market Supply Rationalization Underway; Both Stks Rally

Is it time to buy the memory chip stocks? Dinesh Moorjani, an analyst at American Technology Research , this morning raised his ratings on both Micron Technology (MU) and SanDisk (SNDK) , asserting that after years of dramatic supply expansion, the NAND flash And DRAM bit supply will grow far more slowly in 2009. He argues that the NAND and DRAM markets are near a cyclical bottom. He increased his ratings on both MU and SNDK to Buy from Neutral. For SanDisk, he notes, the big issue has been an oversupply on NAND. He says the excess will remain through the first half of 2009, but with a return to supply/demand balance in the second half driven by “the significant supply-side rationalization taking place.” He notes that bit growth in 2009 will grow 84% - sounds high, but that is the slowest growth since the inception of the industry, he says. “Capacity expansion has come to a standstill,” he writes, with 200mm capacity coming offline. Meanwhile, he asserts that the ... (link)