Steven: Please pardon me from butting in. I don't know how anyone can make an accurate estimate of 1997 earnings. So much depends on DRAM pricing, which again is dependent on supply and demand. It is also highly dependent on cost of production, which is dependent on die size, # of mask steps and yield. We know that Micron is continuing to reduce cost, since their gross margin did not drop anywhere near the same extent as the DRAM prices during the last quater. Just like previous cycles, when people start making unrealisticly negative predictions, the worst is almost over. It always seems that the whole market would collapse and there is no more future, but the truth is, the market always recovers. DRAM is still the most widely used and most important silicon device, and demand will only increase in the forseeable future. No matter how rich those Asian companies are, nobody wants to be in a business to lose money. They will cut capital expenditure (and they have), setting the stage for another rally when demand catches up. Don't forget, it costs more than one billion dollars to build a fab nowadays, and people just don't make that kind of investments if they can't see any profit potential. Micron has survived previous downturns, and there is no indication why they wouldn't this time. I can't tell you when it will happen, but if you can look beyond the short term (12 - 18 months), I think the company will once again thrive.
Adrian |
