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To: blake_paterson who wrote (57420)	10/11/2000 11:14:45 PM
From: jim kelley	Read Replies (1) \| Respond to of 93625

RE: Tactics of Fast followers BP A major tactic of a companies that are fast followers is to slow the pace of the leader. This reduces their need to spend capital of new equipment and development and gives them a longer interval in which to catchup and cash in. AMD and Micron are not technology leaders. They are both fast followers. DDR has the role of slowing the pace of introduction of the P4 and RDRAM technologies. In the second quarter, Micron "short sheeted" Samsung, NEC and Toshiba by stating that they were going to produce RDRAM. They did not do this and still have not done it. However, this led to a shortage of RDRAM for Workstation shipments in the second quarter. The net effect of this was to delay the inevitable. Neither Micron nor AMD have the capital necessary to keep pace with the capital expenditures being made by Samsung, NEC and INTC. Thus their best tactic is to slow the acceptance of the new technologies and buy themselves time and income with the old technologies like SDRAM and DDR. Hampering the scheduled deployment of RDRAM simply raises the cost of the P4 launch. INTEL knows this and that is why they underwrote the RDRAM for P4 with OEMS. AMD had a good quarter but they will be production bound next year because they do not have the capital necessary to build new facilities. 250 M a quarter is not going to cut it. New factories cost billions and take years to construct. Meanwhile, AMD needs to pay off the debt incurred on Dresden and its other plant. Micron's situation is similar to AMD. They did not have the earnings over the last few years sufficient to meet their operating and capital expansion needs. Hence, the 1/2 billion investment from Intel followed by a sharp bite to the hand that provided the investment. <G> Funding bashers and propagandists is a lot less expensive than building new fabs. <LOL> Business is war.....