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Technology Stocks : Micron Only Forum

MU 236.50

+2.7%

12:59 PM EST

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To: Jeff Leader who wrote (47723)	8/18/1999 11:04:00 PM
From: Thomas G. Busillo	Read Replies (2) of 53903

Jeff, this is the one thing I don't understand: Despite the depressed spot market prices of DRAM during the first half, the company focused on long-term contracts with customers and charged $2 to $3 more than open-market pricing. Why is Samsung reported to be charging $2-3 more than spot on their long-term contracts and today Salomon states that contract pricing was in the 5.50-6.50 range v. average spot 64MB prices @ 7.10 Obviously MU wants market share and if they can get it and it makes economic sense (IMHO any strategic benefit of the margin v. share trade-off in a product with switching costs that are virtually non-existent is close to nil) they'll go for it, but is there something more going on? Where do the "incentives" to CPQ fit into that? What are they? What's the duration? Have other OEM's negotiated similar "incentives"? Good trading, Tom

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