Wily,
INTC is always concerned about the price of Memory as well as other components of a PC. If any one gets out of whack this will reflect in the overall price of the PC and to some degree cause a slowing in sales. DRAM, HDD, Video, MB, etc all have dropped dramatically over the past 2 years and primarily benefiting only three players, MSFT, INTC and DELL while the others are operating on a non-profit basis.
That is why INTC is so concerned about memory. Recent stabilization, to slight increase, in the latest technology PC100 memory although slight is now adding to the bottom line instead of the past consistent reductions. This does not bode well for the next generation memory which is RAMBUS and SLDRAM. The new technology is very complex, with tighter specs and more sophisticated fab and test facilities with lower yields. This worries INTC and rightfully so since to compound their problem, fabs are closing, suppliers are migrating to foundry business or just getting out of semiconductor business altogether. Most important... the Asian crisis is causing a separate fallout. The asians are looking to merge their companies to stay in longer and buy time... but this will also have the effect of controlling memory prices and pushing them higher.
This future view of higher prices is causing INTC to probably consider spending some money now to open the gates a little and then down the road they will sell more Processor chips.
MU is in a unique position now with the TXN deal, in that they will have more fabs that are at least .21microns and will be the leader in the memory business...so they may be a able to negotiate from a better bargain position then maybe 6 months ago.
DavidG |
