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To: Keith A Walker who wrote (46297)	6/13/1999 2:00:00 AM
From: Bert Kuo	Respond to of 53903

From Reuters via Yahoo: biz.yahoo.com biz.yahoo.com

To: Keith A Walker who wrote (46297)	6/13/1999 2:50:00 PM
From: Skeeter Bug	Read Replies (2) \| Respond to of 53903

kaw, they already are. it is no longer a matter of if. mu will lose quite a number of millions this q from semis and they will lose more next q. why? they REALLY don't have a choice. the ONLY way to REDUCE cost / unit is to dramatically INCREASE output. what would you do? decrease output while everyone else ramps output making your cost structure 20%-30%-40% higher than your competitors with a minimal positive effect on global pricing? or, would you ramp output like all your competitors and let the chips (pun intended ;-) fall where they may? you have to choose the latter or you go out of business. you still might go out of business, but at least it isn't guaranteed. an additional note: >>Including the three, all Asian makers sold $12.04 billion worth of DRAMs globally in 1998, accounting for 78.5 percent of the world total of $15.35 billion, Dataquest data showed.<< add in mu and you are in the 90%+ range. a few mom and pop shops shutting down doesn't matter - a big boy must give up the ghost. >>Analysts said the key for survival was the ability to reduce production costs, steady cash flows to lead the industry's technological progress, a sound product structure and a clean balance sheet.<< >>the ability to reduce production costs<< this is the same as saying add capacity and negatively impact pricing.