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Technology Stocks : Micron Only Forum
MU 285.43-2.5%3:59 PM EST
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To: Carl R. who wrote (38793)9/22/1998 2:04:00 AM
From: Sun Tzu  Read Replies (1) of 53903
 
Carl, thank you for the most intelligent post I've seen here or anywhere else for quite sometime. I've saved it for future reference. No one can underestimate the power of human survival instinct; so your point about Micron having no choice but to play the game of chicken and forcing others to blink (because they can) is very interesting. But aren't there others like Micron who just have to win the DRAM war? Say Samsung, NEC, LG Electronics... To be sure most Asian producers will not be able to get funding and will die off. But will they last long enough to take MU with them? And I have a hard time believing Samsung and NEC will be unable to get fundings. How sure are you that the top 3 DRAM makers (besides MU) will have funding constraints?

Your point about the marginal costs is very interesting as well. Have you taken the rising interest rates into account? (T-bill rates have been falling, everything else, esp. the B grades has been rising).

Also, I have a theory that next year most of corporate IT budgets will be to fix Y2K (and to a lesser extent EMU) issues. This could mean that the demand for DRAM will fall as its supply (due to new fabs) will increase. I think MU is a buy if at present conditions it can survive for another 2 years. Implicit in my statement is that since neither of us can predict how the environment will change, I am assuming net-net it will stay the same.

Lastly, have you or anyone here called Micron to ask them on the unknown issues (like where the approximate break even point is)?

Thanks,
Sun Tzu
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