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To: Carl R. who wrote (22981)	10/26/1997 1:41:00 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 53903

carl, a couple comments. 1. i've seen no data that says mu is the low cost producer. they are very good and right in there with the best, but i don't believe the they are the best just b/c they say they are. in the 10q, they said they didn't know what the inventory levels of their competitors were. thery don't know inventory but they know their cost? come on. remember, :demand continues to remain strong for dram..." ;-) 2. the low cost producer wins sometimes - not all the time. the deep pockets win an awful lot, too. mu spent $500 mil on equipment last year. they earned $200 mil from operations. they were -$300 mil during the peak production of 16 mb dram. i won't even comment on their aggressive accounting techniques used to boost eps. 3. mu had to sell over $100 mil muei and offer $500 mil just to stay afloat - DURING THE GOOD TIMES. this didn't happen on the transition to 16 mb. 4. mu made a boatload of money on 4 mb before switching to 16 mb. this is different now. 16 mb was a net loser for mu. they spent more than they made. 64 mb is already in a glut before mu gets a decent crack at reducing costs. 5. mu expects to spend $1 bil to just get in the sram and 64 mb game. they have to do this before their process expertise can even kick in. everyone else will be way ahead of the process curve to begin with so mu will have to catch up and pass them in a terrible pricing environment. let's summarize. mu earned a few pennies over a dollar per share last year. they hawked some muei for another $0.60 or so. they pulled in about $1.60 and change for the year. they spent $2.50 a share for equipment, etc. a net loss. they expect to spend another $5 per share this year. with dram hovering around $4-$5 (really closer to $4), mu is making less than when they made $0.33 with an asp of $6.50. so it looks like another year of profits around $1. it could be much worse. so, mu has spent or plans to spend $7.50 per share in order to make $2.00 and change, if things go well. please tell me what part of that business plan gets you excited? tia...

To: Carl R. who wrote (22981)	10/26/1997 11:53:00 PM
From: Trey McAtee	Read Replies (3) \| Respond to of 53903

carl-- i appreciate your thoughts, but i must disagree. look at things this way...samsung and others are making mostly 64Mb now, and are probably making money on it...i dont care what CMP/techweb says, we have no real way of knowing. hell, we dont even know MUs exact costs. when we reach transition, MU will be loosing a lot of money. however, samsung and the others will be making a mint. they might rack up 3-4 billion in profits on 64Mb, that will fund their production of 256Mb. even though MU is the low cost producer, by the time they are in 64Mb the asians will be beating them on costs. granted, the situation will not hold up and MU will begin to overtake them on costs, but the fact remains..they will be in an extraordinary cash position when compared to MU. and you have to remember that part of what made MU so profitable this year (yeah, it wasnt much, but they did make money on ops) was asian inventory holdbacks. MU took advantage of this situation, and the japanese especially were not happy about it. i doubt they will be so generous next time. asking why the company is still in business is moot. they are still in business because they have done just what is required of them. that is why i would not hold them up as an example of a quality american company. AND, with accelerating cost of building a wafer fab means that there is a very possibility that MU may not be in business in 5 years. however, i give this very slim odds<G>.of course, i answered my own question with what i just wrote. the stock is down because they have done just what is needed to stay in business. with this line of posts i am not attempting to bait bulls, or bears. i want us to come together and make suggestions for solutions to the problems the company faces. my motive? simple, i want to be long MU, not short, and i want the long term value to make intels rise look paltry.however, these problems are not going to be easy to solve, and our suggestions will in all likelyhood be ignored by a management that is sadly lacking. those you who are long are currently suffering from the boom bust cycle in the industry, although for MU it is a somewhat more dramatic. is this the reason for the stocks swings over time? yes. the sad thing is that it is avoidable. there is no reason the company should be doing this badly. good luck to all, trey