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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Sam Citron who wrote (54003)	10/9/2001 8:27:15 PM
From: Jacob Snyder	Respond to of 70976

At the bottom of chip cycles, nearly-new fabs get shut down, and the owners just write it all off and walk away. Until the pain gets bad enough, they play a game of chicken with the others in their market, seeing who is willing to lose the most money before giving up. Every cycle, it's that way. It's always worst in the commodity sectors. In all countries, including the U.S., these are partly political decisions. Look at how our government has recently decided that many companies, in a variety of industries, will not be allowed to go bankrupt, no matter how bad their balance sheets. Airlines, for instance, which is an even worse commodity/capital intensive/high fixed cost industry than DRAMs. I wouldn't be at all surprised if, at some point in the future, when Micron gets into trouble, our government bails them out. They'll find some plausible excuse: "it's a strategic industry", "foreign competitors are being unfairly subsidized", "we need to save U.S. jobs", "it's the only thing the Idaho Senator asked for in this year's Appropriations Bill", yadda, yadda, yadda.