Micron Technology, Inc. (MU), SanDisk Corporation (SNDK), Samsung: Who Has The Upper Hand?

Samsung: The world’s biggest memory company keeps innovating

Samsung is not only the world’s biggest mobile device seller, but also the world’s biggest memory company. Even Apple, Samsung’s main competitor in the smartphone arena, needs to rely on Samsung for logic processors and memories. Apple pays almost $10 billion each year to Samsung .

The enormous amount of cash Samsung receives for its components gives the company enough resources to be constantly innovating, making it a tough competitor.

An example is the investment in NAND chips. A huge demand for NAND chips (as many as 300 million) is in the making, as ultrabooks move from solid state drives to SSDs and NAND chips.

However, producing enormous amounts of NAND chips requires installing large wafer fab facilities, which are expensive and take at least two years to build and equip.  Well, Samsung just spent $7 billion building one of those plants in China, which suggest they will be the first ones to benefit from an acceleration in demand for NAND chips.

Final foolish thoughts

Although Samsung has more financial resources than SanDisk and Micron Technology, Inc. (NASDAQ:MU) to invest in top technology, both SanDisk Corporation (NASDAQ:SNDK) and Micron have been able to survive all these years in such a volatile industry thanks to the management commitment to keep a solid financial support and a culture of constant innovation.

In the case of SanDisk Corporation (NASDAQ:SNDK), as much as 25% of its current market capitalization is backed up by cash and short term investments . Micron, on the other hand, will soon become the world’s second largest memory manufacturer and will have access to the mobile DRAM space, thanks to the acquisition of Elpida.

These two companies are well prepared for fierce competition. The good news is that the memory market dynamics seems to be improving, and this is likely to benefit all three competitors. Therefore, adding some exposure to the memory market this year sounds very attractive.

The article Choosing The Best Memory Stock originally appeared on Fool.com.

Adrian Campos has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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