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To: Skeeter Bug who wrote (51515)	6/26/2000 9:22:00 PM
From: Chas	Read Replies (1) \| Respond to of 53903

Bank of America, research report said today on DRAM pricing: DRAM Pricing Pricing has jumped convincingly into the mid-$8s for plain vanilla 64Mb PC-100 8x8 DRAMs,signaling what many producers, brokers and dealers have felt for several weeks is a big upward push into the late summer/fall build period. Just how far this will carry remains to be seen but anyone watching this market over the last five years would find it unusual to see such strong movement in front of the seasonal build, suggesting that supplies are unusually tight. Since capital spending for DRAMs is running significantly behind what it did at this infant stage of the last four DRAM cycles (1980s into early 1990s), one would surmise today that prediction of entering STRUCTURAL SHORTAGE is proving accurate. Their internal belief is that not enough wafers will enter production over the next 12 months, at least, to satisfy rapidly (above plan) growing customer demand: PCs, servers, networking. Thus, even if the market encounters the "normal" winter slowdown, supply will lag demand. By the way, we?d point out the same situation developed in 1993-1995 and LASTED for three years. All we?d argue for today is that the odds are rising that DRAM pricing will meet our model through F2001 and exceed that of consensus by a wide margin. Also, capital spending for DRAM capacity ? as with all other chip production - will materially upside consensus expectations and industry forecasts. This will become apparent as the second half of this year progresses. It is typical of semiconductor cycles that perceptions on equipment spending LAGS the fundamental outlook surrounding chips.