To the Evil Masses...
The 64M DRAM market is in it's early stages of market demand. There are still a good number of 16M parts around. Dr. Evil believes that this tends to buffer pricing in the 64M market.
Observers of the 1M to 4M transition witnessed the same phenomenon. 4M DRAM prices dropped rapidly until 1M supply dried up. 4M prices eventually firmed allowing low-cost producers such as MU to tally 200% margins above fully loaded costs. The bottom line was, AND IS, that there just weren't as many die around.
The 4M market cruised along steadily, the predominant industry wafer size 6", the industry DPW yield between 200 and 300DPW. Does anyone find it interesting that we are entering a similar period with the predominant wafer size 200mm, 8", and the industry typical yield between 175 and 250DPW?
Are there more fabs today? Clearly, yes. Will MU attain the 200% margins that led them to the building of the Lehi fab? Probably not. But, 150% margin isn't bad in any manufacturing endeavor. This is attainable, near term. These are the market dynamics that will drive the stock price higher.
As Mr. Bigglesworth predicted, MU will hit $45 by year end, probably sooner!
Dr. Evil |
