SSNLF - Micron jumps as Samsung's decision to cut chip output bolsters confidence
2023-04-10 07:57:16 ET
- Micron Technology ( NASDAQ: MU ) shares gained over 6% premarket on Monday after fellow chipmaker Samsung Electronics ( OTCPK:SSNLF ) announced plans to reduce its memory chip production .
- "We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured," Samsung Electronics said in a regulatory filing on Friday, according to multiple media outlets.
- The move is being seen as a positive for Micron, according to KeyBanc Capital Markets, which suggests that it "will allow a quicker return to supply-demand balance and potential rebound and also remove concerns on irrational supply behavior."
- Citi's Christopher Danely explained "Samsung's decision is huge positive for the industry, and should help to spur a recovery starting in 2H."
- Samsung's ( OTCPK:SSNLF ) production cut comes after rivals Micron ( MU ), SK Hynix and Kioxia Holdings have reduced their spending and cut their chip production.
- Micron ( MU ) CEO Sanjay Mehrotra late last month, in a statement announcing Micron's second-quarter results and outlook, said he was "confident" in the company's long-term demand outlook and "we expect gradual improvements to the industry’s supply-demand balance ."
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Micron jumps as Samsung's decision to cut chip output bolsters confidence