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Strategies & Market Trends : Sharck Soup
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To: DebtBomb who wrote (29030)6/21/2001 7:33:36 PM
From: StormRider  Read Replies (1) of 37746
 
Micron (MU) 37.71 +0.87: Micron is coming under pressure in the after hours session as company
came in light on MayQ results. Given the recent trend in DRAM pricing, the tone of the call was
discouraging. Management disclosed that pricing for 128mb SDRAM has declined dramatically from
$4.50 last qtr, $3.60 this qtr and now prices are under $3.00. Inventories have climbed and PC
demand remains weak. Also reportedly contributing to the pricing weakness are the Taiwanese
foundries increasing sharply their numbers of DRAM wafers which exacerbates a market that already is in severe oversupply. The company declined to provide any guidance for fiscal Q4 (ending Aug) on
sales or EPS....Memory is used in everything from PCs to personal digital assistants, products that
haven't exactly been flying off the shelves in the past year. That has created unusually large inventories at
Micron. The PC problem does not appear to be improving anytime soon as the majority of
motherboard and component manufacturers are experiencing flat OEM business in June vs a weak
May. Some analysts are beginning to speculate that June could be a bottom. In our view, Micron
shareholders should make it a point to listen in on the conference calls of Dell, Gateway, Compaq etc.
as it's difficult for Micron to make comments on end user PC demand as it is not on the front line. In
order to see MU break out of its trading range (32-45) over the last 8 months, the box makers need to
signal that June is likely the bottom on the supply side. Until then, we expect MU to trade sideways. --
Robert J. Reid, Briefing.com
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