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To: benwood who wrote (46727)	6/24/1999 2:29:00 PM
From: Carl R.	Read Replies (1) \| Respond to of 53903

Good question why MU didn't guide lower. I guess they figured that the low prices were obvious, and they did tell them about the inventory, so I really didn't see anything surprising about the earnings announcement at all, either good or bad. I suspect that the tone of the conference call was more of a factor in today's action, but I haven't listened to it. One thing that you have to keep in mind, quite seriously, is that what matters is how the picture is developing for the future, not how things look today. DRAM is cyclical, and if the pieces seem to be fitting into place for a cyclical upswing, MU will rally even if their current position is ugly. For that reason, MU stock is cyclical as well. For awhile all the news is good and the bulls have fun, and then for awhile all the news is bad, and the bears have fun. The bulls had fun from last fall to early spring, and since then the bears have had fun. But the day will come again for bulls, because it always does. What will trigger a sustainable rally? Some key elements that could trigger a real rally could be other makers closing fabs or converting them to other uses, other makers reducing production, implying a higher manufacturing cost than MU, actual evidence that RDRAM will be used in computers for main memory (which would soak up excess capacity due to larger die sizes), introduction of new devices requiring huge usage of DRAM (Sony Playstation???), new applications or operating systems that require more DRAM, etc. You get the idea. As a practical matter, prices should stop falling in this range because we are getting under production costs of some makers. For this reason I don't think the picture is likely to worsen much anytime soon. But I also don't see any evidence that it will get much better soon, either, and therefore my basic position is on the sidelines. Good luck, Carl