Mike,
David, So, if MU is the low cost producer, why do they have to borrow money at 7% plus an equity stake (admittedly worthless) while the Japanese can borrow at 2 1/2% with no equity stake? Sorry, it just doesn't compute.
Being a low cost producer, today in DRAM manufacturing, does not mean they HAVE TO MAKE money. Unfortunately I don't believe any of the companies are showing a profit on 16mb chips and probably just minimal profit in 64mbit chips.
You mention Korea, Taiwan and Japan almost interchangeably and IMO are completely different situations. First of all the Japanese, although not making money in DRAM have many other products in which to make money and given that their diversity gives them more opportunties to fund than MU.
...but the Koreans are shot to s&%*, including Samsung, but especially the others. They got into a busines they had no right to start, they squandered money on overcapacity that is now taking them down. Their currency value is cut in half, which gives them some advantage in exporting, but have debt and raw material expenses in $US that will eventually bankrupt them. They are stuck with their technology which they will minimally be able to upgrade, relative to the rest of the industry.
Mike I don't disagree with you on some of your opinions on MU, I just look at MU as the best runner in a dog race...but I put my money on the rabbit:-)
Thanks
DavidG |
