Re: MUEI sale
Management made the point last week that a few years ago when MU was much smaller, all of its larger DRAM competitors seemed to have a PC operation. This meant that the MUEI holding was unimportant. Now, MU is larger and some of the other DRAM vendors have reduced their PC operations (whether by design or not is another question, but that's the way it is). As a result, the MUEI connection MIGHT (no way to prove, so let's emphasize might) have an adverse effect on MU's DRAM marketing.
Does DELL worry about MUEI? No way. Does CPQ worry about MUEI? They're probably breathing a huge sigh of relief that it's a competitor and not a colleague. Does GTW worry about MUEI? Probably on a secondary basis, at best. And if DELL enters into a multiple billion dollar sourcing arrangement with IBM, do conflicts seem to be part of the sourcing consideration? Probably less and less.
Steady supply at competitive prices seems to be the overarching purchasing concern. If anything, the "reason" to sell MUEI due to competitive concerns seems to be more like an excuse as to why the deal should be done now and wasn't done earlier at higher prices. There has been a significant opportunity cost to MU shareholders, and now that Klein's group for the integrated products has moved from MUEI to MU, the rationale for holding onto MUEI is probably reduced to seeking maximum value for a property that may have already seen its peak.
What impressed me at the meeting was the clear refocus of the company on memory. Shedding MUEI and displays and downplaying RF are all, in my opinion, good things. Hopefully, the lesson has been learned and MU will increasingly play to its (not inconsiderable) strengths. - Tad LaFountain |
