Hi Ohkami; Looks like you're right on the accounting technique. Now what was the accounting technique used at IFX?
Re: "I would quite like to know what their inventories in units (Mbits or the like) were." You can pick that off from the balance sheet, more or less, by converting from $ to units.
Re: "If they carried a lot more inventory than usual, that would mean that they actually tried to stabilize price by producing for their inventory." I seem to recall that they did exactly that (for the quarter you're interested in), as measured by their total inventory which increased despite the drop in chip prices. The resulting increase in inventory, as measured in bits, would have been about 4x, and that may be the explanation for your observation on the size of their inventory write down.
It's pretty clear that you have to use the total inventory dollars in your estimate for CGS, but even that will have problems. The inventory figure includes raw material (i.e. unused silicon wafers) that will fluctuate in size, and will not generally be written down according to the DRAM market. And as with my complaints about the other technique you used, there are tons of issues with comparing Infineon to Micron in that area as well.
In addition to my previous complaints, there is also the issue of accounting for the exchange rates. The US dollar has been rather high priced for some time now, but we've had big time trade deficits anyway. If that reverses, Micron's cost position will improve even more.
-- Carl
P.S. There's a whole bunch of other complaints that I have with your technique of calculating Micron's costs as compared to Infineon's. See #reply-16881514 for the full list. |
