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To: Dave B who wrote (73593)	5/24/2001 7:43:28 PM
From: Bilow	Read Replies (1) \| Respond to of 93625

Hi Dave B; Re: " The next question, on which we may agree or disagree, is how elastic the demand is for DDR. Just because someone forces the price of a product down does not mean that volume will increase significantly." I agree with you, in that Micron's lowering DDR pricing will not increase sales of DDR by much, at least in the very short term. The fact is that DDR doesn't do much for the Piii, and the Athlon doesn't have that much market share. The ramp for DDR volumes won't occur until the P4 has DDR chipset support. But unless DDR is cheap at that time, that ramp could be delayed a good bit. Thus Micron's move. -- Carl

To: Dave B who wrote (73593)	5/25/2001 9:06:35 AM
From: Sun Tzu	Respond to of 93625

Your original post that I responded to presented price as a "reactionary" part of the product... Thanks. Now I see your point. So now we are debating the sequence of events. I think that the change is almost instantenious which makes the question moot. In other words, the question in Micron's mind is something like "I can sell X DDR at $Y or I can sell X+Z DDR at $Y-W". The real question, as you have pointed to, is price-elasticity. I suspect the kind of info we need to analyze this is not easily available. But the in principle, the more elastic the demand, the faster the drop towards cost of production. Another reason for the price reduction may not be the actual profits at the moment, but rather strategic moves to destroy some competitors or to put pressure on RDRAM production. If you find any info on the elasticity or worldwide production numbers, I am all ears. ST