To: John Graybill who wrote (47420 ) 7/30/1999 6:15:00 PM From: Land_Lubber Respond to
Here is a copy of a letter I just sent to a reporter at TheStreet.com.thestreet.com .did say, but with what you didn't say.This time last year, there were few signs the chip market would soon rebound from its two-year slump. Memory prices, often used as a barometer to gauge the health of the chip industry, are firming. all the time, whether it is true or not. Go back to Micron's conference call of one month ago, for example, to hear Kip say that the bottom had already been reached a month before that (i.e., two months ago now). computer makers seem to be aggressively stocking up on inventory in anticipation of back-to-school sales. even more later? Or that demand will slump later, during the traditional channel-stuffing period? Check whether more PCs are actually being sold or not, that is the key to understanding whether this really is good news or a red herring.At Micron, he learned that the company had convinced Compaq (CPQ:NYSE) to stuff more memory into each of its budget-line PCs, and that should boost the whole memory market. incentive program that Micron used to achieve that. The rumor is that it was something like "buy two, get one free." That way Micron can unload overstuffed inventory without "officially" lowering the selling price. The loss can be charged as a "marketing expense."
