Here is my summary of what the various MU bears are looking for before they will be convinced that MU is doing better:
Sandstuff is looking at DRAM prices and notes that they are still rising, but he wants to see what happens next quarter. He is also looking for strength in the foundry business. These seem reasonable indicators, and so far DRAM seems firm, and TSMC is projecting a better year.
Landlubber says that things are too complicated for a single bottom, and he is probably right.
Skeeter wants to see Korea at 100% and rising dram prices, along with AMAT in the crapper. Interestingly Korea cancelled scheduled production cutbacks, yet DRAM is apparently still firm to rising. The bit about AMAT is a stroke of genius. Strong DRAM prices could well ignite yet another round of capacity increases, resulting in a renewal of the problems of the past. AMAT's stock price is up sharply, but AMAT's sales are certainly "in the crapper" for now. Thus for now all of Skeeter's requirements appear to be met, but order increases for AMAT could be bad for MU.
MB - wants to see growing demand excluding Christmas, failure of chip equipment to achieve easy capacity increases, and consistent profit. To me these are mostly after-the-fact indicators, but still important. Certainly post-Christmas demand and pricing will be critical, but it will be another month before we know what will happen. As for consistent profitability, that will obviously take awhile. And as for failure of equipment companies to keep Moore's law working, I don't expect that to happen for awhile yet, but it could be that the newer equipment won't be rapidly deployed. We'll have to watch AMAT's order rate. Finally MB admits that MU has become a matter of hatred. Once that happens it is difficult to overcome.
Carl Held - Has not stated what he would consider to be the signs of a true bottom. He obviously considers it important that they are selling chips at above cost, an eminently reasonable requirement. While they were not doing so last quarter, I believe that the combination of firmer pricing and the shrink to .21 micron has lowered costs below selling price. If it hasn't, MU will be back down in a hurry, but if as I believe MU's cost is or soon will be close to $6.50 a chip, MU could stay above 40 for awhile to come, and it could well rise further if prices remain stable.
Thanks to all that participated,
Carl |
