Tomahawk, WI 02/12/2014 (BasicsMedia) – Micron Technology Inc (NASDAQ:MU) sees a lot of potential for better margins and profitability in 2014, because of its deal with Inotera Memories Inc. Shareholders in MU stock stand to reap big in 2014 simply because the deal between MU and Inotera, which is a Taiwanese-based maker of DRAM memory, gives it a much larger share of the market. MU enjoyed one of its best financial performances in 2013, because it saw its sales figures shoot through the roof due to a fire that consumed the premises of its major competitors. Customers had no option than to come to Micron Technology for their needs, but 2014 could be better.

Micron Technology Inc (NASDAQ:MU) is one of the leading makers of advanced semiconductor systems. Its worldwide operations are responsible for the wide range of NAND, DRAM, and NOR flash memory. Up to this point, Inotera, the Taiwanese company, has been responsible for around 33 percent of Micron’s DRAM. However, from 2014 and going forward, the new deal between the two companies means that Inotera will be contributing up to 100 percent of Micron’s DRAM output. What this means is that everything Inotera produces in 2014 and beyond, will be directed or distributed to Micron Technology Inc.

The new deal entitles Micron Technology Inc (NASDAQ:MU) to up to 35.5 percent of Inotera’s operating income. If you look at Inotera’s operating income for the December 2013 quarter, which came in at about $357 million, you quickly discover that Micron Technology would then receive close to $127 million of this amount. With the passage of time, this amount will keep increasing and this is good news for Micron since it means that the company’s margins will keep increasing, in just the same way that its profits will take an upward trend in 2014. The market expects Micron’s operating income in February 2014 to be $55 million, but it will actually raise $127 million.

Under this deal between Micron and Inotera, the former expects to see a reduction in its cost of goods, which will fall by between $21 million and $25 million. Obviously, this will have a positive bearing on the company’s gross margins for the period ending February 2014 and beyond. Thus far, the revenues from sale of DRAM products have risen by as much as 69 percent, during the first few weeks of 2014. The trend should continue throughout 2014, thus contributing to an improved margin for MU and increased profits. When you also consider that MU recently acquired Elpida, you begin to appreciate that 2014 could be massive for it.

In summary, Micron Technology Inc (NASDAQ:MU) has a lot going for it in 2014. As the company goes into agreement with new partners around the world, and makes newer acquisitions, while carrying out its cost-cutting measures, Micron Technology Inc (NASDAQ:MU) will have one of its best fiscal years ever, if not in a long time. Investors who have been patient with Micron Technology Inc can now look forward to better returns on investment than they imagined.

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