Hard to say when and at what price MU will split. I have no inside contacts with MU.
64 DRAM spot price has hit $ 10. Can it go to 20, possible but too ambitious. I have feeling that we will see continued firming of DRAM prices thru the end of the year. Except for upgrading to 0.18 micron, no new fabs are under being put up. It takes 3 Billion $ to construct one. With huge losses of last few years for DRAM makers and debacle of Daewoo, who wants to loan money to them for DRAM fabs, to initiate another cut throat cycle ?
The banks will force financial discipline on DRAM makers. That will act as tight rope on irresponsible Korean electronic companies. South Korea has takes Billions from IMF and they can pay back only if DRAM and other electronics prices stay healthy. You can not pay back Billions, selling DRAM at losses or PCs at $ 500.
In my opinion, days of $ 500 PC are numbered. Remembers Peoples Air for $50 tickets. Same is about to happen to PC prices. They will stabilize to go up by 100-200 Dollars. Demand for PCs and components is very healthy. Lots of people around world are starting to use PCs. Japan is 2nd largest economy in the world and waking up, after prolonged recession, India is waking up to be an economic giant, China has tons of money in foreign exchange reserves and Chinese are starting to use computers more and more, Latin America is using PCs more and more, Europe is starting to pick up growth.
My guess is 64 MB DRAM should be between $ 14-16 by Christmas. Every dollar up in DRAM price now, adds substantially to the bottom line. Micron stock may trade around $ 110-120 by Christmas. The other group that will strengthen will be Disk Drive makers. If they stop foolish-suicidal price cuts, they could double to triple quickly.
But that is my biased view. Make your own judgement. |
