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Strategies & Market Trends : The New Economy and its Winners
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To: Bill Harmond who wrote (62)5/11/2000 4:38:00 PM
From: Jeff Leader  Read Replies (3) of 57684
 
Supplies Down Since when? The ongoing process of feature-size shrinks results in constantly increasing supply, even when no new factories are being built.

Prices up Again, since when? Prices are still down on the year, and MU's ASP for the current Q will probably be down from last Q. This could easily result in another earnings shortfall. The Street shrugged off one shortfall - would they be so generous a second time?

Capacity constraints Samsung is preparing to bring new significant new capacity online within a few months. Capacity constraints on other products (CPUs, capacitors, etc) may be the gating item now, and could restrict the demand for DRAM. And with Al trying to slow the economy, the demand picture going forward is not clear.

Low-cost leader An urban legend IMO. Samsung is at least on par, if not ahead of MU in terms of feature size. And Samsung's manufacturing yields are said to be excellent.

What's more, Samsung is typically a year ahead of MU on the design side. This allows Samsung to make big profits on things like RDRAM and 256MB SDRAM (which they've had in production for over a year). The U.S. government has shielded MU from Korean competition by way of anti-dumping duties. But the WTO has already ruled against the U.S. in this dispute:
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