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Technology Stocks : Micron Only Forum
MU 246.84+4.2%Nov 14 9:30 AM EST
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To: Fabeyes who wrote (43155)2/21/1999 9:58:00 PM
From: PAinvestor  Read Replies (3) of 53903
 
Hi Fabeyes, DRAM prices themselves do not need to rise in order for chip companies to make a profit. With chip shrinks proceeding at the rate they are currently, all chip prices have to do is remain stable for a while and your variable costs will drop as you successfully shrink. In fact, I regard current chip prices as an anomaly - they should begin to fall gradually, but costs should fall at a greater rate and the difference is, well, greater profit.

You also raise a point that is worth reiterating - the Koreans are not prepared to destroy DRAM pricing for the sake of gaining market share. It is a major rethink of their previous strategy and is why I am confident that there will be no massive Korean ramp-up that will destroy the pricing environment (even if they could).

What you point out about MU is also very interesting. Are the yield problems related to depth-of field issues? As for Rambus, it has definitely fallen from favour. There is a rumor that INTC may be backtracking on its exclusive support for RDRAM and may be prepared to work with the chip makers for 133MHz SDRAM. (see The Register) Another chink in the INTC armor?

Regardless, it seems that we are in agreement on the direction that the DRAM market will take from here. Though I believe that the upswing will last for considerably longer than you. We have only just begun to enter a supply shortfall which should last for sometime yet.
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