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To: Zeev Hed who wrote (34933)	11/20/1999 5:48:00 PM
From: richard surckla	Respond to of 93625

Suppliers and OEM supply pacts. Is there any room left for RDRAM's production? Is this the reason for the shortage of RDRAM supply? I keep hearing that the demand is there but the RDRAM supply is not. Date: 11/20 00:54 EST Disclosing supply pacts is suddenly a big deal Nov. 19, 1999 (Electronic Buyers News - CMP via COMTEX) -- It has suddenly become trendy for OEMs and suppliers alike to publicly boast about long-term supply contracts. IBM appears to have started the trend last spring, when it announced agreements with Acer, Dell, EMC, and Nintendo. But lately, these public disclosures have been very component-specific, and come at the beginning of a potentially long-lasting components shortage, particularly in memories. Dataquest predicts the shortage will kick in early next year and last up to 18 months. Such forecasts send institutional investors into the "let's overreact" mode, and put pressure on systems makers to prove they won't get caught short. The earthquake that hit Taiwan in late September heightened public concerns. And within these OEMs, supply-chain managers have been forced to be creative in their sourcing strategies just in case the forecasts are correct. That's why Compaq and Gateway teamed with Micron to report to the world that the two computer makers had signed long-term supply contracts with the memory-chip manufacturer. In addition, Samsung last month said it will supply billions of dollars' worth of displays to Dell in the next few years. And just last week, Micron archrival Hyundai Electronics revealed that it was negotiating supply contracts for semiconductors and flat-panel displays. The deals, with companies including Compaq, Gateway, and IBM, could be worth up to $50 billion. Of course, no one has any idea what the actual contracts will be worth, since there are so many variables to consider over a three- or five-year period, particularly in such a volatile industry. For Hyundai, the disclosure of the agreements gives it an opportunity to say, "We're back," particularly in DRAMs, which were the company's main cause of distress in the last three years. With LG Semicon being moved into its fold, and with the market tide finally turning in its favor, the company finally has something positive to say, and it's saying it loudly, using its president, Kim Young-hwan, to do the talking. Dozens of these contracts are no doubt being drafted throughout the industry, and have been for years, but without any fanfare. But now, with supply-chain management the buzzword on Wall Street, and concerns about the global supply, we'll see these deals made public on a regular basis. Perhaps they will give us greater insight into the inner workings of the modern-day supply chain. But I wouldn't bet on it. -E-mail me with comments and suggestions at msheerin@cmp.com. -0- By: Matthew Sheerin, Editor In Chief Copyright 1999 CMP Media Inc.