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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 148.32-3.3%Nov 14 9:30 AM EST
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To: Katherine Derbyshire who wrote (7505)1/7/1999 4:14:00 PM
From: Ian@SI  Read Replies (1) of 10921
 
Katherine,

A couple points:

1. 64Mb chip spot prices are climbing. This tends to support the rumour that MU is getting extra orders because the Koreans can't produce any additional 64Mb chips. It further lends some credence to the market's expectation that another round of upgrades and / or new fabs is now underway.

2. Per Bagley's comments on CNBC yesterday<?> morning, technology progresses at such a rate that a DRAM fab can become effectively obsolete within 18-24 months. At the current rate of progress, we'll see the Gb chip next year. To me, that's absolutely amazing. I believe the 4Mb chip was still "king" as recently as 1996.

So, "time" alone has been sufficient to wipe out the DRAM oversupply that's been plagueing the industry for the past 3-4 years.

RE YOUR POINTS:

1. Money: They'll get it somewhere. To me, "where" is irrelevant. "When" is much more important. But there's no sign that the Government is backing out of the picture according to the WSJ (article re LG & Hyundai). So I doubt that money will slow them down.

2. I'm skeptical of any recovery driven primarily by the chaebols. They've behaved suicidally in the past, and have shown no real signs that they won't do so again.

YES!!!

That's exactly what I'm counting on. I don't own the DRAM guys. I don't really care if they make the money that their business plans indicate that they should or not. And I would welcome them building at an even more suicidal rate as long as they buy equipment from those companies in which I have a position.

JMHO,
Ian.

P.S. Welcome back and happy new year. I hope you enjoyed the holidays.
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