Tom, Thanks for taking the time and the pains to respond in detail. While you are correct in pointing out that TK has been grossly wrong several times, who has not been? Our own much ballyhoed Rev. Mike Burke on this thread has been so out of touch with the times/reality on his views (and his much touted taiwanese connection) that I am again inclined to think that perception has a lot to do with which side of the fence we wish to sit on than reality.
On to some specifics:
The writer enters the following TK quote into his piece:
"They are pioneering into new higher densities prematurely."
If he/she had done their homework, they might have come to the interview
armed with the TK's most recent public comments on the 64 Mbit issue, which
came on 6/24/97 in an ML Bulletin on MU, reiterating a near-term accum. due in
large part to the fact that "We expect Micron to make a successful transition to
the 64 Mb about six months earlier than expected." [SOURCE: TK/ML Bulletin
on MU, reiterating near-term accumulate, 6/24/97]
Let me clarify at the outset that I am not defending TK here. But I don't see any gross inconsistencies in his position. If MU is going to be able to crossover to 64 Mb six months earlier, and the market is ready for it, more power to them. The question that we have to address is: The current glut (and the consequent reduction in 64 Mb part prices) that stems from the early crossover by the Koreans and the Japanese, does this represent a sound strategy? All it seems that they are doing right now is killing the market for 64 Mb even before it has happened.
TK might be justified in saying that the early crossover by specific companies (while the demand for the part is not there) without the market doing so represents a flawed strategy; Would it not be better to crossover with the market (An aspect MU has proven itself to be very adept at, they transitioned to the 4 Mb and 16 Mb with perfect timing, concomitant with the demand for the parts) and reap the benefits of good timing correspondingly?
As to knocking down TK for poor predictions, one has to also give the man credit for calling the turnaround from last october correctly, when everyone was ready to write MU's obituary.
You raise several valid points with respect to what we need to find out from the Koreans and the Japanese. However, if you can keep short term profits (and not sacrifice them) and transition to the long term scenario without any loss of efficiency (I remember a bunch of people saying MU would never be competitive in 16 Mb market, given their propensity to stick to the 4 Mb part longer than most others), you are working with a better strategy than one in which you are giving up current profits for an uncertain future scenario.
Best Regards,
Sridhar |
