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To: DavidG who wrote (23106)	10/28/1997 2:16:00 AM
From: Trey McAtee	Read Replies (2) \| Respond to of 53903

david- sounds good, but theres only one way to confirm. run your number with their production number, then compare to the revenue from DRAM products. if it jives, we have a definite winner, you will have the rosetta stone you have sought, and we will have something more than the thumbnail method we have used<G>. good luck to all, trey

To: DavidG who wrote (23106)	10/28/1997 3:04:00 AM
From: Skeeter Bug	Respond to of 53903

dave, you are making an assumption and you aren't telling anybody you are making it. it is very critical. you are assuming mu sold a consistent amout of parts through the entire q. i think this assumption is invalid. here's why. the day after mu's last q ended, dram supply flooded the market and drove the price down over $0.50. in one day. the day after mu's q ended. an extremely logical inference can be made. mu held back inventory and released a lot of it AFTER their q had ended and it drove down the price. the very day after their fiscal q ended. now, this means that mu shipped most of their chips when the prices were higher near the end of the q. hence, their average asp was higher than if they sold product evenly throughout the q. poof, asta la vista 10% premium for mu parts. another reason that i believe mu doesn't get a premium is that the sub $1k boxes are the hot sellers. those boxes contain the least expensive parts available or else everyone will be like gtw - reporting revs up 31% and a big fat loss for the q. still another bit of reality that you didn't put in play is that peter shaw said mu is selling parts very inexpensively - as low as the high $3s - so that they don't lose market share. i understand he's in the business and knows these things as it is his living. another point is that mu is one of the most followed stocks in the world. show me a news article that says mu makes a 10% premium. just one. it is probably right next to the news article that says dram is currently higher than achilles ;-) now, what is the problem with spot prices above barely above $4 and mu selling parts barely above $4? there is no 10% premium.

To: DavidG who wrote (23106)	10/28/1997 1:01:00 PM
From: mike iles	Read Replies (2) \| Respond to of 53903

DavidG, Thanks for the insight on Smith prices. It's hard to compare Achilles and Smith closely ... Achilles updates roughly once a week but we don't know if this is a new spot price or an average for the week, although it looks like a spot, and Smith's price is for the week ended ... an average for the week? And the two aren't on the same day-end. But they look to track pretty closely, although from my calculations (and the pyramidic scrolls ... Beyond the Fringe anyone?) it looks like Smith is about 38 cents higher on average (this is from late Aug. thru to present). Don't know how you got Smith lower than MU's $6.50 ASP for the Aug. Q, because using Achilles I got $6.25... but it's obviously an inexact science. In your earlier comments, you talked about 20% of MU's sales being specialty products. Not sure what you mean ... I'm excluding MUEI's boxes altogether. In the 10K they said flash was <1% of memory sales in fiscal '97 and static RAM (SRAM) was 1%, down from 6% two years ago. Also, doubt very much if they get a 10% premium for their memory chips. This is a huge volume commodity market. The $6.50 ASP last quarter is likely due to their timing of sales as Skeeter said. Finally, MU management has put out this idea that there's some sort of a difference between spot and contract markets. This sure smells like a red herring. What I mean is if a contract lasts 1 week and you have a glut of product it gets repriced at spot once a week. So in reality how does this differ from spot? ... smoke screen from Boise ... and analysts like Niles regurgitate it. I could argue the opposite. E.g. say I'm CPQ and MU trys to sell me memory. I tell them boy there sure is a lot of this stuff around, maybe you should shut the fab down for a couple of weeks (heh,heh). Tell you what. I'll allocate you 20% of my requirements for the next 3 months but it's gotta be at a 5% discount to spot. If supply overwhelms demand, you would expect this to happen, i.e. contract to be at a discount to spot (Jerry D. probably thinks I'm nuts). regards, Mike