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Technology Stocks : Micron Only Forum

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To: Patrick Hennessey who wrote (45369)	4/25/1999 9:21:00 AM
From: A. A. LaFountain III	Read Replies (3) of 53903

Re: "one more real good bloodbath in DRAM will be good for the industry" One of the more interesting aspects about the 1999 version of the weak DRAM market arises from Hyundai's press release in the fall of 1998 about the ramp this year of the Eugene fab. If you take the projected revenues and unit shipments from the press release, it's an exercise in arithmetic to derive the $6 64Mb ASP that they were using for their 1999 shipments. I bring this up because if this were an impediment to their profitability, I doubt that they would trumpet it to the world in a press release. Thus on to two questions: 1) If Hyundai can make money at $6, what does that imply for the rest of the industry? 2) If a major producer is making money @ $6, why should supply growth begin to decline as market ASPs drop from $10+ to their current levels (which are still above $6)? It could very well be that my first assumption (Hyundai making money at $6) is way wrong, which would obviate the need for the questions. But if it's right, then there's a major problem with the DRAM market for several more months. - Tad LaFountain

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