Right you are, Tom. Right now the marginal news is all bad, but soon enough the marginal news will be good again. With prices falling this fast, the selling price will soon be below the marginal cost of some of the laggard producers, if it isn't already. The leaders, including Samsung and MU, are well ahead of the laggards in reducing costs. Don't forget that there are still some producing at .28µ. Once the price goes below marginal costs, expect shutdowns, plant closings, and wafers converted to logic, and then prices will stabilize again, setting the stage for another run up in the price of MU.
In my opinion this next run up will be more lasting than the last two, may well be slower but last for years, and will be based on sound fundamentals. I would be surprised in fact if this time around Tad isn't on board. I'm not sure when it will start, however. I suspect that we'll bottom out somewhere in the next 10 points and begin building a base for the next leg up, and that the next leg up could well start in August.
Carl |
