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Technology Stocks : Micron Only Forum

MU 230.24

+2.5%

Nov 26 3:59 PM EST

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To: Thomas G. Busillo who wrote (44898)	4/7/1999 10:15:00 PM
From: Carl R.	Read Replies (1) of 53903

Tom, the clause: The Company purchases assembled and tested components from the joint ventures at prices determined quarterly and generally representing discounts from the Company's average sales prices. These discounts were lower than gross margins realized by the Company in the second quarter of 1999 on similar products manufactured in the Company's wholly-owned facilities, but were higher than gross margins historically realized in periods of excess supply. In any future reporting period, gross margins resulting from the Company's purchase of joint venture products may positively or negatively impact gross margins otherwise realized for semiconductor memory products manufactured in the Company's wholly-owned facilities. is fairly clear. The price that the company pays the JV for the memory is a percentage of the selling price. In times of shortage, this reduces the margin and profit, but it also assures that in times when prices suck, the margin will always be positive. This should tend to reduce the size of loss that MU will report if prices keep falling, and decrease the size of profits if a shortage develops. Carl

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