I've been reading the Micron posts for the past week. It just seems to me that there are a lot of folks shorting this stock. I also remember what MU was like during December last year. It just kept hovering at around 53 dollars as if shorters kept trying to hammer it down everytime it tried to past the 50+ mark. Then all of sudden, boom once it broke, then it really flew. This 55 mile per hour range that micron is stuck in feels similar to back then. So... if there is any break than there would be another short squeeze. Just a feeling though, so tell me if this time it's different.
Peter Piper (your electronic plumber)
In the meantime, I read this from the Channel magazine
Q: What do you think about the fact that Japanese
semiconductor manufacturers have remarkably
decreased their capital investments?
Minamikawa: The majority of Japanese
manufacturers, such as Hitachi, Mitsubishi, Fujitsu and
Matsushita, decided to close their factories in the U.S.
and Europe. In addition, their investments in Japan
during 1998 were expected to drop by 30-40 percent
from the previous year. I am very much concerned that
this will have a negative impact on them. Sooner or
later, their current production lines will fall behind,
especially as they move toward introduction of
0.21-micron and smaller design rule technologies.
From this point of view, it is a questionable strategy for
Japanese manufacturers to cut down their investments.
On the other hand, Micron in the U.S. resumed its
investment on a large scale, even during this serious
depression. In 1998 Micron invested US$1 billion in its
Idaho factory, and in 1999 it will invest more, to be
ready for the shift to 0.25, 0.21 or 0.18-micron design
rules. Micron has three other factories, which it bought
from Texas Instruments, and is planning to invest an
additional US$1 billion to renew these fabs. With these
aggressive investments, the monthly production
capacity of these factories will be 25 million chips
(equivalent to 64 megabit DRAMs) by the end of
1999. Including its other production lines, Micron's
total capacity will be more than 40 million chips. The
reason why Micron is investing so aggressively while
Japanese and Korean manufacturers are very hesitant
or even decreasing their investments is clear. Micron
believes that the DRAM supply will soon be in short
supply.
Q: Do you predict that the DRAM supply will become
short?
Minamikawa: Yes, definitely. Without a doubt, by the
third quarter of 1999, the full production of all DRAM
manufacturers will not be able to satisfy the demand.
The prices for PCs will go down, but the memory
capacity of an average PC will increase from 64
megabits in 1998 to 128 megabits in 1999. |
