Hi Zeev:
A few pennies worth of observation on the "memory shortage" that the N.Y. boys keep mentioning in their "research".
I'm out in the field a great deal as you know. Maybe I'm talking to the wrong people, but whenever I bring up the "memory shortage", my contacts just chuckle. As well, execs at a couple of the big box builders have also noted that they can't see it either.
Last year, the N.Y. analysts spent the whole year calling for a memory shortage that never occurred. Yield growth last year was historic and more than made up for the bit growth and they missed this completely as they were focussed on the "lack of new production plant" issue.
This year,while memory yield improvement isn't quite up to last year's (at least so far), it's still pretty darned good. Also, there are new fabs coming on stream this year (particularly in Taiwan, at least if the island doesn't sink into the sea.) Flash has been the only area in memory where real shortages have occurred this year, and with everybody and his dog moving in, it won't be long before there is a glut in that area (and it isn't all that big a percentage of the whole memory arena in any event).
With corporate PC buying all but dead (and for the first 3 quarters of 1999, it wasn't bad), and this spring's big consumer buying binge (coincidentally it occurred just as the NAZ peaked) now petering out, it's difficult to conjure up HOW a big memory shortage will occur. Perhaps we will have a solid autumn PC sales cycle, but that would surprise me. The whole darned situation looks saturated to me, and to many of the folks out there that do the selling. Business isn't buying so heaven help us if the U.S. consumer decides to take a borrowing holiday, and the first four months numbers show a hint of this.
IMO, if there was a real shortage, memory prices would reflect this. As memory prices have more or less just oscillated in a range for the last several months, it smells more of good marketing than anything else.
Of course I may be just looking in the wrong places.
Your comments re RMBS prospective earnings are similar to mine,....... well at least in general terms (g)
Best, Earlie |
