Semiconductor shares rise as Micron predicts memory recovery (updated)

Shinsung Tongsang Co

21/03/2019 12:15

(Updates share prices, adds Summit Insights comment)
    March 21 (Reuters) - Shares of semiconductor companies
worldwide rose on Thursday, after U.S. chipmaker Micron
Technology Inc  MU.O  predicted a recovery in a memory market
saddled with oversupply as demand for mobile phones slows.
    Stocks in chipmakers have been pummelled in the last six
months as demand for Apple's iPhones declined and prices for
DRAM and NAND memory chips sank due to an oversupply, adding to
concerns that a two-year-long semiconductor upswing was coming
to a halt.
    Micron's remarks came as it reported quarterly earnings
above analysts' estimates on Wednesday as cost-cutting helped
offset falling demand and prices.  urn:newsml:reuters.com:*:nL3N2174G8
    A chip recovery will likely be fuelled by fresh investments
from data center customers and more memory content in phones,
according to JPMorgan analysts.
    Micron's shares rose 8.7 percent on Thursday morning. Shares
in Advanced Micro Devices Inc  AMD.O  and Nvidia Corp  NVDA.O 
rose 2 percent, while Qualcomm Inc  QCOM.O  and Intel Corp
 INTC.O  climbed 1 percent.
    SK Hynix  000660.KS , the world's second-biggest memory chip
maker, saw its shares surge nearly 7 percent by 0330 GMT, while
Samsung Electronics Co Ltd  005930.KS  gained 4.3 percent.
    Both Samsung and SK Hynix said in January that they expected
sales of memory products to revive in the second half of the
year.  urn:newsml:reuters.com:*:nL3N1ZT1IL urn:newsml:reuters.com:*:nL3N1ZL2KL
    Summit Insights Group analyst Kinngai Chan upgraded Micron's
stock to a "buy" rating and predicted that the chipmaker's cost
cuts would outpace price declines in the second half of 2019.
    Shares of European chipmaker Infineon Technologies AG
 IFXGn.DE  rose 1 percent, while STMicroelectronics NV  STM.BN 
added 1.6 percent.
    Analysts have been wary about prospects for the memory chip
market due to lower demand for smartphones and slumping
investment from data centre companies.
    "We see 2019 as an industry cycle bottom and what makes this
interesting is that Micron will emerge from it without negative
earnings," Rosenblatt Securities analyst Hans Mosesmann said,
adding Micron could focus on returning at least half of its free
cash flow to shareholders.
    Tech research firm TrendForce in a report on Wednesday said
it expects a only a slight decline in NAND flash chip sales in
the second quarter as demand recovers from smartphones,
computers and servers.
    "Although it won't cause an immediate reversal of the
oversupply situation, it will have a positive effect on the
market environment," analyst Ben Yeh at DRAMeXchange, a
Trendforce division, said in the report.
    U.S. chip equipment makers, which supply tools for chip
making and designing, also edged higher on Thursday. Lam
Research Corp  LRCX.O  rose 2.5 percent and Applied Materials
Inc  AMAT.O  jumped about 3 percent.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Micron sees memory chip recovery coming later in year, shares
rise      urn:newsml:reuters.com:*:nL3N2174G8
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 (Reporting by Sonam Rai in Bengaluru and Heekyong Yang in
Seoul; Editing by Christopher Cushing and Sai Sachin Ravikumar)
 ((Heekyong.Yang@thomsonreuters.com; +82 2 3704 5647; Reuters
Messaging: heekyong.yang.thomsonreuters.com@reuters.net))