The Beauty of Taiwan

         觀察驗證 - DRAM vs. MU

         Micron stock prices lag DRAM prices at the top of the cycle by 6-8 months because the bit growth percentage change tends to offset average selling price percentage change.
         Micron stock prices lead DRAM prices near the bottom of the cycle by 2-3 months because stock prices 'forward look' a DRAM bottom.
         TrendForce estimated a 5-10% DRAM price increase by Q1 2021. The bullish forecast signifies the first leg of a typical 2-year DRAM up cycle.
         With the push of DRAM price increase alone, Micron stock should reach a triple-digit level ($105) in the first quarter of 2021.

         As Micron's revenue is 70% exposed to DRAM and 26% to NAND chips, its stock prices have largely followed a similar DRAM cycle which follows a long four-year cycle. However, regarding the way that stock and commodity prices are related, the good news is that Micron's stock price is also more predictable in that the stock price tends to top after the topping of the commodity prices.

         Since there is a clear correlation between DRAM spot prices and MU stock prices, the relationship may be statistically stable enough to use future DRAM price to estimate the future MU share price. Historically, there is a 1.4X relationship. That is, for every 1% change in DRAM prices, there is a corresponding 1.4% change in MU's stock price. Accordingly, if the DRAM price has a 5%-10% upside for Q1 2021, it would add a 7%-14% increase in MU's stock prices. Subsequently, simply based on the bullish DRAM outlook, MU may have a good chance to hit $105 soon.

         Micron Price Rises With DRAM Price

         Memory Chipmaker Micron Raises Q2 Guidance Above Street Forecasts

         終端產品、資料中心需求熱，第二季 PC DRAM 合約價將大幅上揚 13%~18%

         三月31日MU的財報日便知分曉。