Micron, Sandisk shares jump on warning of NAND chip shortage

OCZ lowered their forecast for second quarter earnings due to a shortage of NAND chips that it uses in the production of its solid state drives. This was seen as a good thing on Wall Street and both Micron's and Sandisk's shares jumped. This is because a shortage in NAND chips would stop the sliding price of flash memory that has been dropping lower in recent days due to overproduction.

Micron increased by 5.97 percent to $6.55 and Sandisk managed an 8.0 percent increase to $43.85. "Supply and demand is coming into balance with the cuts and the industry rationalizing its capacity," said Kevin Cassidy, an analyst at Stifel Nicolaus. Supply had previously been increased to meet the demand for Apple's iPad and other devices.

Decreased sales had created an overabundance of NAND chips which lead to decreased prices. Toshiba announced back in July that they would be decreasing their output by 30 percent in order to help stabilize prices. Citi analyst Glen Yeung said that the effects have yet to be fully felt across the industry.