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Technology Stocks : Micron Only Forum
MU 265.92+7.0%Dec 19 9:30 AM EST
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To: Sridhar Srinivasan who wrote (16456)7/11/1997 8:57:00 AM
From: Thomas G. Busillo   of 53903
 
"....seem to be missing the central points of the bullish thesis for mu's ascension:"

Sridhar, with all due respect, IMHO the central points of the bullish thesis are primiarily the summits on the heads of certain sell-side analysts well-versed in the game of market psy ops.

"1. They will continue cutting costs significantly (Don't ask me how much, cos no one knows.)"

They should cut costs and they will. But they are not the only company making DRAMs that can cut costs.

Also, I'm assuming they're already FAR along on the basic production learning curve and there is a limit on what can be done at present in terms of technological feasibility. By the time someone comes up with the "optimium" 16-Mbit chip, the sweet spot of the market may have passed. These "curves" are curves and not descending diagonal lines. Then again, you could argue that cuts in cost per unit have to be viewed relative to ASP's, but then that opens up a whole new area of debate re: where ASP's are going.

"2. This glut is not going to be a perpetual phenomenon."

The glut may not be perpetual, but the boom-bust cycle is. I guess the bulls see the beginning of the boom phase in some product lines. I'm more of a DRAM bear than DRAM bull because I'm seeing the bust phase still lingering in 16's and I'm guessing the boom phase in the 64's (if and when it happens) won't be as dramatic as past booms.

Good trading,

Tom
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