Tomahawk, WI 11/12/2013 (BasicsMedia) – Looking at the nearly 200% value appreciation of Micron Technology, Inc. (NASDAQ:MU) from the rock bottom in the past 12 months, it’s quite safe to say that the semiconductor manufacturer has successfully withered the storm. From a 12 months low of about $5.33, the stock is currently trading above $18.50 per share. This is a significant resurgence that should excite investors considering the company’s struggles in 2012.

In the past fiscal year, the massive shift from PC manufacturing to tablets and smartphones negatively impacted on the company. It was apparently not prepared for such a big technological shift. However, in the new technological dispensation where the market demands super-high memory devices, Micron is having good moment in business. Its high-end devices are blending well with the tablet and smartphone memory demands, giving it brisk business. Its line of DRAM is particularly a premium product.

Boost from acquisition

Micron’s acquisition of Apple’s memory supplier Elpida Memory has also been a blessing to its business. Following the increase in DRAM selling prices and the leverage from Elpida acquisition, Micron’s F2013 revenue peaked 10% to come in at $9.07 billion, against $8.23 billion in the fiscal year 2012. The higher selling price for its memory devices also pushed up its gross margins from 12% in the previous year to 20% in 2013. Effectively, its operating margin improved from -7% in 2012 to 3% in 2013. What’s more, the company’s net margin has soared in 2013, hitting $1.48 billion, thanks to the acquisition of Elpida.

The amazing thing with Micron is that it has quite high outstanding shares, yet even in such situation, its earning per share is well above that of most of its competitors at $1.13 per share. It is important to note that in the previous year the company was in the negative, reporting $1.04 per share loss.

And that’s not the best you can expect from Micron. The company is has enough strength to raid the memory industry now that uptake of smartphones and tablets is on the increase. The Mobile DRAM demand project for the next quarter exceeds 400 million GB. The tablet DRAM demand is set to peak at 65.8 million GB and that of smartphone is expected at 334 million GB. So there is significant increase in memory demand for the next quarter and given Micron’s production capacity and market network, it’s poised to make good use of this business opportunity.

Securing the future

Micron is also security its future. It’s investing heavily in research and development (R&D) which, for any tech company, is a lifeline. There are a lot of dynamics in the digital market and keeping abreast with these dynamics is where real revenue lies. As for the semiconductor business, the market is expected to demand for more sleek and powerful devices and this means that Micron needs to get its labs working on nextgen chips and memory items. Looking at the R&D allocations, Micron has been increasing its budget for this vital segment. In 2013, R&D expenses hit $931 million, topping $918 million last year.

Micron Technology, Inc. (NASDAQ:MU)

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