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Technology Stocks : Micron Only Forum

MU 241.14

-6.7%

Dec 12 9:30 AM EST

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To: Skeeter Bug who wrote (39585)	10/2/1998 8:56:00 PM
From: Knighty Tin	Read Replies (2) of 53903

Skeets, With depreciation you hit on a very sore point and one where I agree with MU. Basically, Asian fabs are depreciated twice as fast as MU's American fabs. Though that kills eps in the short term, the lower tax rate helps the Asians find cash to expand for the next round. It also means that if both MU and NEC report a $100 million loss, that MU's is more real, cash impacting than NEC's, as a larger part of NEC's reported losses are simply depreciation writeoffs. Where I agree with Mu is that their depreciation expense does not reflect their true costs of replacing obsolete facilities and equipment. So, net, net, they are losing more than they report and the govt. isn't eating its fair share of the loss. And cash is sinking into the cess pool. MB

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