I like the discussion on this board. I am actually more into wafers than memory, but they have similar problems. And I am considering taking a stake in MU for a long term hold.
As far as fabs being built, no one in their right mind is going to build a fab here or in Europe that produces a product that has a falling price. It would be a very hard sell to the financial guys. I don't anticipate any further memory expansion coming on line any time soon, with the exception of plants that have already been built and are currently idled.
Asia, I think, is going to help MU overall. Yes, they have cheap labor, and they have a lot of fabs. But the Asian countrys, with the important exception of Korea, are having not only a currency crisis, but a credit crisis. They are having a difficult time,from what I have seen on CNBC and other shows like it, in getting raw materials and other such mundain stuff. So I anticipate that several of these plants will be shutting down over the next year. Decreased supply. These plants in Asia don't feed their own country,they are exporters to the USA and Europe. There is no problem there, so demand will still be strong. Reduced supply and steady demand equal increased prices.
Sure, at some point, more plants will be built. But I don't think it will be any time in 1998, and probably not until late 1999 unless prices go soaring. If that happens I won't care because MU will be soaring with them and I would be a happy camper. |
