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Technology Stocks : Micron Only Forum

MU 230.24

+2.5%

3:59 PM EST

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To: Carl R. who wrote (47776)	8/24/1999 10:16:00 AM
From: Thomas G. Busillo	Read Replies (1) of 53903

Carl, I've just named myself head of Samsung. I've assembled our DRAM biz team. Questions: What are we doing? Why are we doing it? Who else is doing it? Who's doing it the best? Why? Can we do that or position ourselves to do that? Should we do that? Your breakdown is right on. IMHO, their people are definitely thinking along those lines. In theory (hopefully), somewhere within Samsung and NEC are people who've slaved over spreadsheets giving quantitative support for the decisions to pioneer into 128Mb. And yet, the decision-making process probably isn't that much different from the 64Mb process. Did it work? Why didn't it work? What didn't they properly factor in? What caused this miscalculation? My answer would be that the 16/64 crossover happened much further along in time than they had anticipated. One reason could be MU continuing to push the 16Mb units, which would have delayed crossover. DRAM chips aren't digitial cameras. There are no "early adaptors" that you can skim and then have prices follow your cost curve down. Somewhere out there are technophiles who will pony up $700-800+ to have that camera just because it's a cool thing to have. Could you imagine a buyer for DELL spending $X more for a 64Mb unit before crossover and then showing it to his boss and going "this is so cool"? No. It didn't happen. It's a commodity product and their are readily available substitutes that get you to the same place cheaper. The "fly in the ointment" are the players who continue to push the envelope on those cheaper substitutes. Will this happen again w/ the 64/128? Or putting myself back at the head of Samsung... What have we ourselves done different to insure this won't happen again? What's different about our expectations re: competitors? Good trading, Tom

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