Micron delivered their Q2 2014 results today and also reaffirmed that they will begin to ramp up volume production of their DDR4 memory chips during the quarter ending May 2014. Additionally, Micron also reminded investors they received a $250m deposit from a customer in Q1 2014 associated with a long-term DRAM supply agreement. Micron’s CEO and CFO both indicated that DRAM inventory is currently “very tight” and it seems more clear that Apple made the $250m deposit was made to secure a multiyear supply of DRAM memory chips that will be very difficult for customers to get their hands on.
I recently put together substantial evidence that Apple was going to showcase Micron’s LPDDR4 DRAM memory across Apple’s 2014 Hardware portfolio. The comments today from Micron’s management confirmed they will begin to ramp up production of their DDR4 chip by the end of May. The ramp timing continues to support my thesis that the DDR4 chip will make its way into the iPhone 6 that will begin to be manufactured in May according to recent reports. My previous conclusion is below:
Conclusion – Micron’s LPDDR4 DRAM Memory will Arrive on Apple’s Hardware in 2014
Apple is a current DRAM customer of Micron Technology, having last used Micron’s LPDDR3 DRAM memory in 2013. Micron presented detailed benefits and product highlights regarding their LPDDR4 DRAM Memory technology almost a year ago. Furthermore, just yesterday Micron’s Vice President of Wireless Solutions Marketing published an article highlighting the benefits of Micron’s next generation DRAM LPDDR4, which tells me this technology is ready for the big show. Lastly, Micron received a mystery payment of $250m from one customer that was reported during their Q1 2014 conference call and their 10-Q indicates that the payment was “for product to be supplied through September 2016″.
Apple is in an arm’s race to improve the performance of their mobile, tablet and ultrabook devices and improve overall battery life. There appears to be little doubt that Apple is going to be showing off Micron’s LPDDR4 DRAM memory across their 2014 iPhones, Macbook and Tablets. You can take my word for it that Apple users are going to love how “lightning quick” the 2014 devices will be compared to the 2013 devices.
Full Disclosure: I am long Micron and have no plans to buy or sell any holdings in the next 72 hours.