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Micron specialty DRAM margins stay elevated
Technology
Specialty memory remains extremely tight, with fabs running close to full, gross margins at historical highs and the next meaningful capacity addition not arriving until 2027. JNK's research indicates specialty memory revenue rose close to 60% Q/Q and ~170% Y/Y last quarter, while Q2 price increases were larger than Q1. Pricing leverage sits with suppliers that still have legacy allocation through next year, including MU's remaining book. Customers are pushing suppliers into long term supply agreements, often with pricing left open, while end customers two and three steps down the chain are approaching component makers directly to secure supply. The key risk is that 2027 capacity additions ease the current squeeze, but JNK believes demand could still run ahead of supply, while a stacked memory product could offer a lower-cost bandwidth alternative to HBM for Broadcom (and Marvell) custom silicon.
Technology
The semiconductor distribution channel is posting ~40% Q/Q revenue growth in 1Q26, but the composition tells a more nuanced story than the headline suggests. JNK's supply chain checks show 800G optical module demand at a 2-year high, with all global Tier 1 makers pulling orders and Broadcom Tomahawk 6 extending the cycle into 2H26; simultaneously, the ASIC-to-GPU semi revenue mix is shifting from 80/20 towards 60-70/30-40, positioning MRVL as the most direct beneficiary. On the consumer side, Apple/iOS is outperforming seasonal patterns (+10% Q/Q vs. flat expected in Q4), though component buyers stocking ahead of tariff increases are raising H2 inventory correction flags. The divergence between data centre acceleration and consumer pull-in risk shapes the setup for H2.
Technology
Questionable quality of 4Q24 results - 1) Revenue had an extra six days but only rose by $8m or 0.6%. MRVL also picked up $13.7m from lower deferred revenues. 2) Ramped up Variable Considerations - a $10m change is worth 1 cent in EPS. Did MRVL load up this account to help sales and EPS going forward? 3) Accrued Warranty Expense fell - $26.9m potential boost in income or 3 cents in a quarter where MRVL only met estimates. 4) Adds back stock compensation - rose to 10.9% of sales - 2.6 cents to non-GAAP EPS. 5) Adjusted EPS also added back $42.3m in product claims that were paid out - 4.6 cents and is not expected to recur going forward. 6) Cuts to R&D spending.
Technology
MRVL beats or misses forecasts by only 1-2 cents, but there appears to be several areas for concern: 1) Allowances for discounts and rebates are huge and driving +/- 7 cents of EPS per quarter. 2) Company adds 2.5 cents per quarter by boosting stock pay as a percentage of sales. 3) A new warranty charge appeared for first time last quarter. 4) AI growth is being swamped by weakness in other markets and inventory remains high. 5) It may not use all its contracted shipping and foundry capacity which hurts margins. 6) FCF is overstated because MRVL records technology licensing fees in the financing section of cash flow.
