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Technology Stocks : Micron Only Forum
MU 224.54+0.3%Nov 25 3:59 PM EST
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To: Skeeter Bug who wrote (47747)8/23/1999 9:55:00 AM
From: Carl R.  Read Replies (1) of 53903
 
skeeter, you ask what happens when 128mb becomes cheaper than 64mb? The answer of course is that unless you can make a 128mb chip for less than 2 64mb chips, you lose more money. As I told you awhile back, the strategy of the Japanese producers to run away from 64mb to 128mb in search of better margins is doomed to failure.

Could MU make 128mb chips instead of 64mb chips? Sure, if they wanted to, but they would only want to if it is cheaper. Is is cheaper? The die will be twice as big, of course, so good die/wafer will be cut by more than half. There are savings in packaging, of course, but until the cost falls low enough for the die this savings is not enough to offset the larger die cost. I suspect we are close to that point, but not there yet. Thus I would guess that 64mb chips are more profitable right now than 128mb chips.

Carl
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