Bucks, you are probably right about Samsung, but theoretically even by not producing for a week or two they ARE reducing supply. Sure not by much, but they are, and yes they may have stockpiles, but as they produce less, they will work off the stockpiles sooner than later.
Let me tell you about my job- but please do not laugh- I am in sales management for a large fruit and vegetable company. Well like DRAM, we have too much supply of a particular product, prices have tumbled in the market place and we nor other canners are making any money because of it, but the supply and demand rules apply here, everyone must lower their price to dump the product they have already produced. So, everyone is losing money but you can't talk to each other (because that's illegal as you know), so one lone brave company might make a decision to withdraw from the market temporarily because they can not make money at the current price level. And guess what happens, the other canners are relieved because someone is "trying to lead the market higher" so they join the bandwagon and stop dumping and prices firm. They all knew they were losing money but someone had to make the first move....Much like the DRAM situation and Samsung, but not exactly....This represents an important first step in the process of the industry trying to firm prices....Look for other DRAM manufactures to follow suit, that is what will be important....
Sorry about the rambling....
MileHigh |
