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Technology Stocks : Micron Only Forum

MU 252.40

+2.2%

3:59 PM EST

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To: Dave Gahm who wrote (37524)	8/16/1998 6:17:00 PM
From: DavidG	Read Replies (3) of 53903

Dave, We would all have better luck guessing how Clinton will testify on Monday than we would be able to guess what the cash burn might be after one quarter after MU takes possession of the TXN fabs.<g> There are too many unknowns left with how MU will handle the new fabs that MU needs to disclose to us. Also MU is still upgrading their own fabs and will not be completed until some time in 1999. I am not sure I will agree with Fabeyes on his wild guessing on yields of current MU 64mbit fabs... but given your assumption that DRAM stays fixed for the first quarter of 99 this is extremely positive for MU. Assuming their bit production increases 10% again next quarter and their continuing line width reduction and increase in yields of 64mbit chips lowers the cost further they could easily show a $100 million net gain for the quarter instead of a loss which will eliminate any negative cash flow for 1Q99 to zero. MU is expecting to be fully converted to .21 by mid 99 and will be further along than the asians especially the Koreans so they will be making money while the Koreans will be moving closer to bankruptcy(except maybe Samsung...and I say MAYBE). Then you will see MU gaining significantly more market share on DRAM (that they make at a profit on)...asuming ASPs stay fixed. I actually believe DRAM will start dropping again in December/January timeframe since that is the normal behavior of all mature semiconductors, but Fabeyes answer and your conclusion, is way off base b/c MU's real strength will be in the increased market share. I think you are just totally missing the boat on the growing strength of MU in the next couple years. The positive cash flow will certainly start later next year. Now you answer me a simple question. When do the SEA DRAM companies start showing a positive cash flow where they can even stay in this business? If you mention Samsung then just talk about the DRAM and PC part of the business that they are in, which is losing a small fortune and not the rest of its company where it may be profitable. Also Samsung is the strongest of the companies what happens to the rest in SEA and their market share? DavidG DavidG

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