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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.

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Nov 14 9:30 AM EST

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To: Art Bechhoefer who wrote (4003)	10/26/2018 8:03:29 PM
From: Elroy	Read Replies (1) of 4827

I read the WDC all again, and yes I see their production reduction will kick in in THEIR Q3, which is Q1 next year. I was reading it as kicking in at Q3 next year. Ok, so their reduced production may help prices stabilize. That makes sense. Now I wonder how they can do that, and not lose market share, unless they were expecting to adding production share above their current market share, and if things had stayed strong they would have gained market share. I always thought if you spent $5 billion making a NAND memory fab you would then run it at 100% production because in this market over the long term market share trumps profits. Maybe not. I also wonder whether we should believe these corporate managers when they tell us their future production plans. It is in their interest to let customers and competitors think that they are producing LESS than they are actually producing, to keep prices high. Why wouldn't they publicly tell us that they are cutting production, and then cut it by 0.000001% in order to be truthful, but still try to grab as much market share as possible? With this announcement of a production cut in Q1 2019, WDC can tell it's NAND customers that the price is a bit higher because they are producing less than planned. It seems it would be good for them to announce a production cut, and then not implement it, but hope the market price includes it (ie, keeps prices higher for a bit). Time will tell. NAND prices seem to be entering the serious decline phase - WDC and SK both said so in their Q3 2018 calls, this was the first time that from the NAND makers perspective things sounded bad. I don't know if these price downturns last 9 months or 3 years, I guess each downturn is different. But the strong NAND environment of the preceding 2 years seemed pretty good, which resulted in lots of investment - it seems this downturn may be worse than usual. But that's just a guess, we gotta wait and see.

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