Micron stock jumps after fire at competitor's plant

Micron stock jumps after fire at competitor's plant

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by Scott Evans

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KTVB.COM

Posted on September 4, 2013 at 2:50 PM

Updated Wednesday, Sep 4 at 6:18 PM

BOISE – Micron stock is up big today, and at one point hit a multi-year high.

The reason is a plant fire at one of its major competitors.

When the stock market closed for the day, Micron stock was up 5.28 percent to end the day at $14.57.

That's because Hynix, one of Micron's two competitors, had a fire at one of its production facilities in China.

That fire then caused a lot of concern that upwards of 15 percent of the world's chip production would stop, sending all eyes on Micron and Samsung, the other player in this market.

That concern has since been significantly tempered and Hynix plans to begin producing again this week, but Micron stockholders are reaping the benefits.

Financial advisor Dave Petso says this puts all the focus on the supply chain, which could shoot the prices of DRAM chips - chips that are in just about every electronic device - significantly higher.

If prices do go up, Petso says Micron could end up having a good year, and actually make money after years of being in the red.

"Imagine we turn the corner and they're making money again, perhaps even buckets of money, brings millions of dollars to the state. The economic impact is gigantic," Petso said.

Here's what Micron had to say about the Hynix fire:

“We do not know enough about the situation or impact on the market to make any further comment at this time. Micron will continue to focus on our customers to ensure that we meet their needs for high-quality memory solutions."

With today's increase in stock price, Micron is up $9.58 since last November -  a 185 percent increase.

Whatever happens with chip production, Petso says Micron is in a good position.

A word of caution - Petso says it's never a good idea to chase a stock because of a promising situation. He says research it and make sure it fits into your portfolio.

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