Micron Technology, Inc. (MU), Intel Corporation (INTC) & NXP Semiconductors NV (NXPI): Not the Best Play in the Semiconductor Industry

Micron Technology, Inc. (NASDAQ:MU) is one of my favorite speculative tech plays, but lately I think shares may have gotten a little bit ahead of themselves. In fact, shares have ridden the recent bull market so much that shares have more than doubled over the past eight months. Having said that, I still think that this company has a bright future ahead of it, I’m just not sure that now is the best time to get in.

About Micron

A leading semiconductor manufacturer, Micron Technology, Inc. (NASDAQ:MU) manufactures and markets a variety of memory products, particularly NAND Flash, DRAM, and NOR Flash memory. The company also manufactures solid state drives and other memory technologies for use in all types of electronic devices. The company sells its memory products to customers under the brand name of Lexar Media, which Micron acquired in 2006, which manufactures SD cards, memory sticks, CompactFlash cards, and readers.

Also in 2006, the company co-founded IM Flash Technologies with Intel Corporation (NASDAQ:INTC). IM Flash makes NAND flash memory products that are used in a variety of consumer electronic devices. The venture has been a success, thanks to Micron Technology, Inc. (NASDAQ:MU)’s NAND technology expertise with Intel Corporation (NASDAQ:INTC)’s expertise with Flash memory technology.

A Shaky History

Despite the success of its various product lines and joint ventures, Micron has struggled in terms of profitability over the years. Out of the past 10 years, half have resulted in operating losses for Micron, and shares have been volatile and have struggled to produce gains as a result. In fact, when you add up the company’s earnings for the past decade, it results in a collective loss of $4.84 per share for that time period.

Micron Technology, Inc. (NASDAQ:MU) is projected to report an operating loss of 43 cents per share for the current fiscal year, and then to earn $0.64 and $1.06 in 2014 and 2015, respectively. Now, if the consensus proves to be accurate, this would mean that Micron’s earnings will be growing at a tremendous rate in a couple of years, and shares would most likely command a more premium valuation as a result. However, that is a big IF, and I’m not sure that the recent doubling of the share price is justifiable, given the extreme uncertainty surrounding Micron’s ability to turn a profit. In fact, analyst estimates for the company’s 2014 earnings range from a very optimistic $1.24 per share to a low estimate of just 2 cents.