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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (46437)	6/18/1999 4:29:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 53903

Memory Chips: Micron Eyes the Summit June 17, 1999 by Norm Alster Despite pricing wars, supply excesses and its own management woes, U.S. chipmaker Micron Technology Inc. is on the verge of becoming the worldwide leader in DRAM production. Are its battered Asian rivals ready to yield the top spot? For readers whose involvement in high tech comes after the release of Windows 95, this may come as a jolt. But long before Gates and Case and Koogle--when the Net was still a Pentagon toy and a Yahoo search meant a walk to the library to find Gulliver's Travels--a world existed that was a virtual negative of our own. In this world, before e-commerce, before Java, before SAP AG, all polarities and values were reversed. In this world, believe it or not, hardware still mattered. Salespeople at companies like IBM Corp. and Hewlett-Packard Co. grew rich peddling big iron. Trade newspapers and magazines fawned over the release of each new model of computer. And governments--especially our own--fretted over the drift of hardware production to Asia. The assembly of personal computers, disk drives, keyboards, you name it, was all moving offshore. Most troubling: U.S. firms had lost their grip on the memory chip business. Tiny dynamic random-access memory (DRAM) chips were deemed "process drivers," and many claimed that expertise in their ultrafine circuitry was necessary for survival in making every other sort of chip. In a kind of high-tech version of the domino theory, loss of DRAM expertise was feared as the first step in the decline of the U.S. semiconductor industry. Never happened. America's decline as a home to DRAM manufacturers did not presage the loss of the chip industry. And now, in one of the more surprising turnabouts in recent industrial history, a U.S. company actually stands on the verge of capturing leadership in DRAMs, a chip market long since ceded to Asia. With economic woes in Korea and Japan reining in its rivals, Micron Technology Inc. last year vaulted into the No. 2 spot in global DRAM production. Now, with its late 1998 purchase of Texas Instruments Inc.'s DRAM operations and its early investments in next-generation production equipment, Boise, Idaho-based Micron could overtake Korea's Samsung Co. to become the world's No. 1 memory chip producer. "Micron has a substantial cost advantage. They have the capacity to be No. 1. My belief is they will emerge as No. 1," says G. Dan Hutcheson, president of VLSI Research Inc., a San Jose chip research firm. And Mona Eraiba, a semiconductor analyst with Gruntal & Co. LLC, New York, believes Micron can hang on to the top spot for a while. "I think they'll hold it for this cycle," she says. It won't be a cakewalk. The DRAM market has been hit hard by price erosion and supply excesses, and a market upturn is hoped for but not assured. So even if Micron does climb to the top, it won't be guaranteed a lengthy or profitable stay. But that fact has done little to diminish the company's drive to become the low-cost, high-volume leader in memory chips. upside.com