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Technology Stocks : Silicon Motion Inc. (SIMO)
SIMO 34.18+2.2%3:59 PM EDT

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From: Elroy4/25/2019 8:38:35 PM
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INTC reported Q1 results. The press release only says the memory segment was down 12% year on year. That sounds pretty good considering what's going on in NAND! Not sure what all is in INTC's memory business, but the conference call will perhaps explain it better.

The press release does single out a challenging NAND environment.

Hard to understand why NAND prices appear to be really really collapsing, but cheap NAND is not yet resulting in massive unit increases in SIMO NAND controllers. This is the biggest SIMO mystery for me at this time. If NAND today costs 40% to 50% of what it cost a year ago, then lots of new devices which use disk drives or other storage media a year ago should be using NAND today. And yet, instead all that seems to be happening is nobody is buying anything.......

Here's INTC's Q1 presentation:

s21.q4cdn.com

Q1 Non-GAAP Operating Margin 28%, 2 points lower .... lower spending and ASP strength (??) offset by impact of 10 nm ramp and NAND reserves (!!)

What's a NAND reserve?? Whatever it is, doesn't sound good......

It's only one data point, but impressive that INTC actually delivered non-GAAP EPS up 2 cents over the year ago quarter. The more pure play memory makers are going to do much much much worse than that. I guess that's a benefit of diversification....

There is something called NSG (meaning??) in their presentation, which I think is the NAND group. NSG sales are only down ~11% year on year. I think that's excellent compared to WDC and MU. INTC says price pressure is a problem, but bit production increases are good, so the result is sales down 11%. Seems excellent in comparison to the regular NAND makers. I wonder why INTC's NAND is doing way way way better than the other NAND makers' NAND segments?

Market weakness results in inventory revaluation (I guess that's the "reserve"), and they are reducing NAND output. So......some of their NAND inventory on their balance sheet is worth less than cost, I suppose. Not sure why else they would need to write it down. I think it means going forward NAND gross margin is expected to continue to decline.....

I'm sure there is more in the conference call, but NAND is listed under all the presentation areas that are "problems".
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