Skeeter, some comments back:
1. Are they the low cost producer? Well, at least they are a very low cost producer. They were making money at 4MB a year ago when everyone else ran for 16MB. They were making money when prices fell this spring and the Koreans tried to engineer a hold-back since they were losing money (but MU wasn't).
2. Yes deep pockets can win. But if they aren't at least reasonably close on cost, those pockets better be deep. In any case, I'm not sure how deep the Korean pockets are these days....
So what part of the plan gets me excited? Well, memory is a cyclical business, and believe it or not, has good times as well as bad. These are bad times, no doubt. Will there ever be good times again? Sure. The best time to buy is of course at the bottom. The question is, are we there yet? We both agree that we aren't quite there yet. But the other question is of course whether MU will survive to see the good times again. And I think that as the low cost producer, or at the least, as a very low cost producer, I am pretty sure that they will.
The difference is that you are focused on all the bad things that will happen. And of course, once all of the bad things are known, the only surprises can be good ones. For example, suppose a major producer gives up the memory business. Who? IBM??, TI???, the Koreans??? MU has nowhere else to turn, so they put all their energy into memory. But if the situation doesn't get any better, sooner or later some other players will give up an play elsewhere.
Good luck,
Carl |
