Strength in chip demand confirmed my Micron results

Micron Technology (MU)  reported after the close last night that it had moved back to a quarterly profit as prices and volumes of DRAM memory chips continued to improve. Fiscal second-quarter profit were $365 million, or 39 cents a share (versus expectations of 24 cents), compared with a loss of $763 million, or 99 cents a share, for the same period in 2009. Revenue was $1.96 billion versus analyst expectations of $1.82 billion, up from $993 million for the same period the previous year. The company said sales of its DRAM products rose 24% sequentially, boosted by a rise in unit sales and in average selling prices. However, revenue from NAND Flash products were down slightly sequentially due to small fall in average selling prices.

The company's shares fell nearly 4% in regular hours trading to finish at $10.37 but climbed back to $10.67 in after hours. A position in Micron was initiated on Monday at around $10.4 and closed at $10.8 on Wednesday. The run in the semiconductor's seems to be running out of steam. Micron has risen from below $4 in the last year on the market recovery.

Micron Technology benefits from potential legal case settlement and rising chip prices

According to court papers released last week, the major manufacturers of DRAM memory chips have reached a settlement in principle in an antitrust case that has been in federal appeals court since 2008. Companies including Micron Technologly (MU) are defendants in the case brought by the state of California and others. No details of the financial terms of the settlement were in the court papers.  "The parties have informed the Court that they have reached an agreement in principle to the terms of a settlement in this and related actions and are currently negotiating a final settlement agreement," said a U.S. Ninth Circuit Court of Appeals order filed Feb. 17. Micron was recently up to $9.50, nearly 5% as chip price sentiment continues to improve. The Semiconductor Industry Association [SIA] said Monday that worldwide chip sales in January rose to $22.5 billion, a 47.2% increase from the same month a year ago. Chip sales were also up 0.3% from December.