Micron Jumps 5%: Raymond James Sees Validation from Apple

Shares of DRAM maker Micron Technology (MU) are up 33 cents, or 5.4%, at $6.34 following a report this morning by DigiTimes’s Josephine Lien and Jessie Shen saying that Apple (AAPL) has placed “huge orders” for memory chips with Elpida (ELPDF), the Japanese manufacturer that Micron is helping restructure after bankruptcy.

The orders were supposedly for Apple’s�iPhone�and�iPad.

Raymond James’s Hans Mosesmann, who has a Strong Buy rating on Micron, writes that such a contract with Apple, if true, boosts the value to Micron of picking up Elpida:

Note that Elpida had 17% share of the Mobile DRAM market in 2011 according to IDC, while Samsung had 52% and Hynix had 27% (Micron had the remaining 4%).�Pro-forma Micron would be the solid number three player right behind Hynix in the Mobile DRAM segment.�Considering that Apple is doing this post Elpida�s bankruptcy while knowing of Micron�s win as the approved restructuring partner, we believe this is an implied endorsement from Apple for Micron to proceed with the acquisition.�This indicates a much more strategic aspect to the deal in our view, as many on the Street have consistently viewed this purchase as a way to pick up assets on the cheap. While the latter is true, this could result in a more strategic relationship with Apple in the long-term. This could even extend to a NAND relationship if Micron were to convert Elpida�s Rexchip fab to NAND from commodity PC DRAM (likely given Micron�s pause in deciding to expand NAND in Singapore at the moment).