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To: Carl R. who wrote (47149)	7/15/1999 2:09:00 AM
From: Jeff Leader	Read Replies (1) \| Respond to of 53903

Carl - It is really not that simple. The majority of costs in wafer fabs are FIXED costs. So the less you produce, the higher your unit costs will be, and the less competitive you will be. So to stay competitive, you must strive to get MORE product out of your fabs by dies shrinks, etc.

To: Carl R. who wrote (47149)	7/15/1999 10:20:00 AM
From: Knighty Tin	Respond to of 53903

Carl, Actually, they have a huge incentive to overproduce. It is the only way to reduce costs so they are competitive. As long as one firm continues to overproduce and lower costs, the others have to do it also. Nope, this is an inventory scam, pure and simple and they have already wasted cash filling those bulging warehouses. They either have to sell the stuff or write it off. The latter makes more sense as the avg. investor is too dumb to know that a writeoff and a few hundred million in cash thrown down the toilet is a bad thing. <g>