Elroy, Sam just wrote a post explaining why the business environment is different today than it was in the past. He makes a good analysis of why this so.
You come back with the same argument you made previously.
No, that's not what happened. He asserted (with no proof) that Samsung Corporate will try to keep Samsung Memory prices high in order to make the competitors to Samsung Mobile suffer from those higher prices. I asserted (with no proof) that Samsung Memory will likely pursue the 50 year plan for Samsung Memory and the goals of Samsung Mobile will not be much of a factor in Samsung Memory's capacity expansion plans. In general, I'm pretty sure the various divisions of a conglomerate pursue their division specific goals (my view) and they are not directed by corporate to sacrifice their division specific goals in order to boost another different division (Sam's view).
In other words, I was disagreeing with one of the main components of his "good analysis" of the "new business environment". You for some reason decided to ignore what I wrote.
He also said previous cash was easy to come by. Today it's easy to come by as well.
He also said there are lots of "new" uses of memory, to which I replied "so what?". If the memory makers can supply the memory necessary for these new uses and do it profitably, then the memory makers all want to have as large a share of that market as possible. The growth of the industry and diversity of the application does nothing meaningful to reduce the memory makers' desire to gain future share.
If someone wants to claim that Micron and Samsung and SK don't compete with each other for DRAM or NAND slots on devices, then it's true, this time is different because there are no share gains to be had, they've segmented the market to where they will no longer compete for share. Is that the idea? if so, prove it.
None of these comments were - as you wrote - just repeating my previous argument: rather, they were pointing out why the view presented by Sam, well, doesn't hold up.
You are presenting a very simplistic economic argument.
Yeah, exactly. If Samsung can spend a billion today and expect to make 2 billion in three years, and/or they can spend 2 billion today and expect to make 3.5 billion in three years despite lower memory prices, and option two results in them being even more dominant in memory than the are today, they will choose option 2. So would you, so would I. So would SK and Micron.
If you are going to disagree with that very simple economic argument, you should explain why Samsung cannot possible choose option 2. It's impossible for them? Why?
Saying that there are a lot of new usages of memory and a lot more bit growth than in past years (really?), doesn't change my very simple economic argument.
My view is the investment community consensus view. Why else would MU have a 5x PE?
Everyone reading this thread knows your assessment. Fine, let's move on
I take this as you don't want to hear the bear case on the memory makers. Fine, I'm just chatting, I have no dog in this discussion. I didn't realize the board was getting overly cluttered with a few posts about the future of memory. Personally I think Gottfried's continual posting of the various charts and boxes of info that he maintains is a massive waste of time (who uses someone else's charts??), but that's just me. |
