DavidG,
Agree with your comments, my cost estimate of $420M this quarter (and Skeeter is likely right it's probably too low) is all operating costs, i.e. manufacturing, R&D, and SGA. BTW it doesn't include financial costs such as interest expense/income. While it's true that some portion of these costs is allocatable to non-DRAM products and that makes it impossible to compare MU's costs to manufacture DRAM to other folks, that's not my main concern. These are ongoing costs ... in theory they're part of management's (pitiful) attempt to diversify away from DRAM and there is some (meager) amount of revenue associated with them. So they're part of the package you buy when you buy MU. Also, there's not enough data to tell what costs are just for DRAM so we can't do that analysis anyway.
My primary concern isn't MU's memory manufacturing costs but rather what are MU's total operating costs, what's revenue, how much are they making, etc... (excluding MUEI from the equation).
Yeah, I cheated on the bullish factors .... let's see, well I've always said they are really good at making DRAM. Unfortunately that skill has been overwhelmed by a bad market. Which brings up the question of why haven't they diversified into other products (DRAM is something like 97% of revenue)... which unfortunately leads to a critique of their strategy planning/execution abilities, which I can't mention because I would have to come up with another bull point and for the life of me I can't think of one so I'm going to stop right here.
regards, Mike |
