My fundamental theory is that the DRAM industry is due for one more good, hard fall. Lots of marginal producers looked at the prices from December to March and said "hey look at these DRAM prices - we can make money at those prices if we just order some equipment" so they ordered equipment and made plans to expand production. Well, DRAM demand apparently softened a bit, and yields came up, and MU solved their back end problems, and lo and behold, falling DRAM prices again. What we need to see is some of these marginal producers throwing in the towel completely, and others throwing in the towel at 64mb and moving to 128mb. Once that happens, MU will be ready to move again, this time a sustainable move.
Thus my theory is in complete agreement with Tad. I expect a very rough period in the near future, followed by a very slow long term recovery. You just as well call it Tad's thesis, as he expresses it better than I do, and has access to much more information than I do. My only claim to fame is that I've been around longer, and have been voicing the same general idea for longer. <VBG>
As for the near future, I know HAL has a buy on, but my computer is fairly neutral, leaning towards short. I see no reason for a rally here, but it is possible. For what it's worth, I'm currently short, but don't feel strongly about it, and am not recommending it for others. I do expect an opportunity to cover to occur at a lower point than today's price, but have no idea when it might happen. If I had to pick a date for a bottom in MU, I'd say late July or early August.
Carl |
