ph, yeah. I mean, obviously the people in the fabs doing the real work (as opposed to the people who schmooze journalists, hang out at investment conferences, and dine at analysts homes) have done a great job reducing costs. But even if they reduce costs in Boise by, say 20% sequentially (?), where does that stand in relation to ASP's. And also, how does that stack up against the potential hit they are susceptible to on JV product?
Bloomberg ran a piece quoting someone from KMT reporting that they broke-even for the month of April.
If all of their output goes to MU AND the price is set quarterly, that suggests to me that MU is buying high relative to what they're doing in their own fabs and MU "the purchaser" doesn't get the benefits of cost reduction as the quarter goes on.
I think it's a VERY fair question to ask them about how the JV discounts work, particularly whether or not they are subject to renegotitation as the Q goes on.
Maybe people misinterpreted the comments from the KMT official. I took them as good for MU the investor in KMT, but bad for the MU the purchaser. IMHO, the latter is more significant that the former.
Then again, I could be misinterpreting it.
Good trading,
Tom |
