To all,
Apologize for inability to post URLs but in following up Larry's latest article on DRAM pricing at Semiconductor Business News (CMP) ... Larry's email will get you there ... anyway ran across a story on MU that's just been filed, "Micron expansion slowed by tester shortage" ... at a recent closed-door meeting for financial analysts (you got to laugh at the way these guys get information out, yeah I laughed till I cried) management told them that a testing logjam would limit output to only 10% growth this quarter (hey DavidG you were right) ... logjam is expected to be broken next March when the new test centre opens in Lehi ... plus additional comments on Korea (bad dogs), SDRAM, lean inventories at customers, etc... apparently Kippy did not say that demand is strong.
Anyway, there's enough data out there to get a pretty good fix on the Q1 results. Revenue should be about $370M in the semi business (I had been estimating $385M based on 15% bit growth) ... this is based on an ASP of $4.50 (gawd that seems high now!) and 10% bit growth. Costs will be about $380M, meaning that these guys will lose $10M in the semi business in Q1 (my previous guess was a small profit of $5M).
This quarter if we get an ASP of $2.00 (unbelievable a few weeks ago) and they get bit growth up 25%, despite what looks like ongoing test problems, the semi business will throw off revenue of $205M. Costs will (conservatively) be $390M. Scary stuff ... I think as this unfolds people will seriously question MU's ability to survive.
'MU ........ long, black cloud comin' down'
regards, Mike |
