When memory supplier Micron (MU) issued a weak 2023 outlook, the stock fell below $60. Its downbeat expectations are due to weaker DRAM and NAND demand.
Micron will cut its wafer starts for DRAM/NAND by around 20% in the fourth quarter. In addition, it will cut its capital expenditure. It expects a negative year-on-year bit supply growth. The semiconductor sector has too much supply.
Micron has good long-term prospects. It is processing newer notes as it adds more EUV equipment to its chip factories.
Intel (INTC) is dirt cheap. Value investors bought the stock at the $24.59 low before the stock rebounded back to around $30 recently. Intel has an attractive product lineup in the PC market. It only needed to cut Alder Lake prices slightly to spur demand. In addition, Sapphire Rapids builds on the existing architecture. Customers may choose from the inexpensive DDR4 or the DDR5 memory.
INTC stock is a hold at current levels.
Advanced Micro Devices (AMD) has an unfavorable product mix. It does not have budget chips that are attractive compared to Intel’s offering. AMD launched new CPUs on the AM5 platform which is expensive. Customers must get DDR5 memory and a new platform. The uncompetitive price is already pressuring AMD to cut production of the latest chip.
Avoid AMD at current prices.
