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Politics : Ask Michael Burke

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To: jeffbas who wrote (25129)	12/17/1997 7:19:00 PM
From: Kerry Phineas	of 132070

JB, if nothing else for the next 1-2 years (about the length of time over which Korean co's depreciate their equipment) the Koreans will have cheap depreciation costs for the equipment they already have, and MU won't be able to afford to purchase new equipment with chips at these levels. A lot of companies will have to go out of business or merge anyways, because of changes in the economies of scale for DRAM manufacture resulting from billion dollar fabs; regardless the death twitches of companies unloading their massive inventory and pumping out chips from fabs that have already been paid for shouldn't be good for MU. Eventually, MU's going to have to come up with a few billion for the next generation fab (I'm not even convinced they've upgraded to current, because I don't exactly trust their investor relations); how in the world are they going to be able to do this? (I'll go long when/if MU goes into the single digits, don't worry).

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