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Technology Stocks : All About Sun Microsystems
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To: adam segel who wrote (407)1/30/1997 8:27:00 PM
From: Geoff Nunn   of 64865
 
An obvious explanation for the weakness in SUNW today is expectations of rising DRAM prices. Samsung and other Korean chip makers have pledged to cut production of memory chips according to today's Wall Street Journal.

Whether the Koreans can successfully pull it off is another matter. Their cutbacks in production may backfire unless chip makers in other countries go along. If you look at the history of international commodity cartels -- e.g. coffee, cocoa, bananas, oil, tin, etc. -- what you usually find is that cartel agreements break apart before long. This is especially true when there is substantial excess capacity as there is today in memory-chip production.
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