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Technology Stocks : Micron Only Forum
MU 259.02+2.6%1:35 PM EST
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To: David Young who wrote (25)5/15/1996 8:28:00 PM
From: Bipin Prasad   of 53903
 
David, an impressive post and very well done. Keep your comments coming.

Following are my comments on your points:

10. History. Remember a company called Mostek?
Read Jerry Denker's comments. Anyway, substitute another
fictitious company name.
Just because one company went under doesn't mean every
company will go under. History teaches us that efficient
companies grow.

9. DRAM pricing typically does not go back up.
Agree on this one.

8. The competition. Blue-Chip, well diversified, electronics
giants who have deep pockets:
A Falacy. These deep pockets had been subsidizing other
sections based on their semi profits (e.g. Samsung). How
will they compete now in their other business ?
Secondly, it is efficiency that counts. Most people
agree that Micron is the most efficient and they have
demostrated their resilience earlier when they managed
to keep their head above water when others drowned in
red ink.

7. 16M DRAMs are now driving the market.
Not a correct statement.
Also, since the price of 16M is exactly 4 times
4M, producing it would not change Micron's revenue today.
Market data does not indicate that 16M is a big portion
of sales. It will become critical when PC come standard with
32 Megabytes.

6. Q3 looks bad. First Call lowered consensus estimates to .41
from .45 and that may be optimistic.
Concede this point.

5. Q4 may well be a disaster.
Only an opinion. I dont agree.

4. Low P/E is a myth.
Why exclude good quarters from calculation. Why not exclude
bad quarters. Why exclude any quarter ? Glass is half-full
or half-empty ?

3. Conversion to 8" wafers is just a catch-up move.
8" wafer is just a way to increase production. This is
another way for increasing production as opposed to
building another fab. Building new fab adds overhead cost
of $500+ million per year, increasing production in other
ways is a lot cheaper.

2. Taiwanese are coming.
Competition scares you ? This is a growing field worldwide.
There will be room for more companies. This is not a fixed
pie game.

1. Micron's Chief Technology Officer owned 105K shares. He bailed
out.
Concede. Soon there will be enough information to answer
why.
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