Micron Technology, Inc. (NASDAQ:MU)’s Present Is Paying Price For Its Future Development

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Micron Technology, Inc. (NASDAQ:MU) didn’t impress in its third quarter 2015 earnings report and questions are being asked about its future. However, as it turns out, Micron is willing to sacrifice the present for the sake of a successful future. That certainly means that some investors are going to be spooked, and they have been spooked going by the movement of the stock. But the management of Micron believes that paying the price now and reaping latter is the way to go.

A combination of unfavorable factors is preventing Micron Technology, Inc. (NASDAQ:MU) from achieving its full potential, and the same came into play in the dismal third quarter performance. Slowdown in the PC market, competitive pressure on mobile and elsewhere, together with changing customer requirements, are some of the issues Micron is battling.

For the fiscal year 2016, the company plans to channel $5.3 billion to capital expenditures, with significant investment in research and development. It is not new at Micron that proper investment in R&D can lead to huge benefits, and the company is ready to make the same bet for a better tomorrow.

$200 million to expand Boise campus

On the R&D side, Micron is planning to expand its Boise campus at the cost of $200 million. A new facility will be going up at the campus and it will be called Building 51, standing right next to what is currently called Building 50. Construction of the new facility is expected to begin in October with possible completion in 2017.

To drive more competitive advantage, with differentiated memory products for better sales, Micron is investing in product innovation. That explains the willingness to put more money in R&D projects like the expansion of the Boise facility.

Targeted markets

Micron Technology, Inc. (NASDAQ:MU)’s ground preparation efforts are geared toward specific targets. The company has identified data centers, mobile devices and automotive as three growing markets that it wants to exploit.

Micron will be looking to diversify its product rendering in these segments, come up with more energy efficient products and also pursue higher performance overall. It is important for Micron to differentiate its products in a highly commoditized memory market.

As Micron Technology, Inc. (NASDAQ:MU) shifts its attention to long-term growth and profitability, the present will likely be painful, but the future will be rewarding.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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