Yes, when prices fall below costs, we will see the most inefficient producers hurting badly, and either throwing in the towel, ordering more equipment, or doing production shutdowns. Seimans just announced the conversion of one DRAM fab to foundry/logic (which probably explains the MU price strength), and we could see more. As for MU's cost, it should be in the $5-6 range by now. Samsung and Hyundai should also be in that range.
If we see DRAM module prices under $40, then if we haven't already, we will certainly see Tiawanese increasing the number of foundry wafers for logic (instead of DRAM), and we could seen Korean plants shutting down part time. In fact I wouldn't be surprised to see Hyundai shutting down LG fabs part time, putting the shoe on the other foot, and perhaps encouraging the LG labor to be more cooperative.
But back to your question, yes, for a variety of reasons prices should stabilize fairly soon.
Carl |
