Tom: re "did you crack a slight smile...?"
In regard to this stock, I find myself with a nearly-perpetual frown. I believe that it is absolutely imperative that the world's largest economy that houses the world's two largest microprocessor companies and the world's three largest PC companies also serve as the domicile of a vibrant and robust DRAM vendor. I very much want to see Micron succeed, not just as an investor, but as an American.
However, I just shake my head when I see this company pursue what appears to be a virtually mindless pursuit of increased DRAM output at the cost of apparent disregard of the SRAM and flash businesses. Nearly all of the benefits of the reduced costs associated with the shift to smaller geometries for DRAM could have been captured with a reduced number of wafer starts, and those wafers could have been diverted to more attractive returns in the other memory businesses.
This goes to a statement that I made on this board several months ago that I believe that the company has grown up faster than management. That's not the knock on management that it may appear to be, because I believe it's generally the case that companies grow in spurts and that there are times when the business lags management's skill set and times that it may jump ahead. The numerous diversions that have served as fodder for many comments on the board have obviously taken their toll. It's my hope that some of the recent backtrackings (e.g., displays, RFID) are symptomatic of a more disciplined approach to the business. If so, that would be good for the company, its employees and its shareholders.
But the necessity of reducing DRAM to less than 75% of semiconductor revenues should be a paramount consideration for the firm. It would be unfortunate if the eventual up-cycle for DRAMs is viewed by management as an ex post facto justification for this lack of diversification. In the meantime, the income statement is bearing the brunt of this error in judgment. The market share "discussion" is only a reflection of this improper focus. - Tad LaFountain |
