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To: DavidG who wrote (24199)	11/17/1997 10:13:00 PM
From: Activatecard	Read Replies (2) \| Respond to of 53903

DavidG, This from the Oct 24 10-K.. ". In addition, during 1997 the Company's inventories increased by $203 million primarily as a result of increased levels of production; of this increase, $83 million is attributable to an increase in work in progress inventories resulting principally from capacity constraints in Assembly and Test due to the Company's transition to SDRAM. The Company expects to work through these capacity constraints by early calendar 1998. " Steve

To: DavidG who wrote (24199)	11/17/1997 10:52:00 PM
From: Ed Beers	Read Replies (2) \| Respond to of 53903

<<As far as "test equipment woes" I don't know where you get the idea I did not want to address. I did't consider it since I thought that it was resolved early this quarter. There really is no reason to think that b/c they had problems last quarter means every quarter afterwards they will have it. If you are privy to something than just tell us. Also, I thought 50-50 for SDRAM and Larry heard 40 for SDRAM if you have anything concrete to contribute to that number than lets hear it. >> David, They were well into the quarter when they had the conference call and they were still addressing the problem then. I assume that their test problem is a combination of increased unit volume along with SDRAM obsoleting some or most of their existing test equipment. The solution is to buy and install more testers. While testers have shorter lead times than say steppers, the lead time is still very long if you have wafers piling up on the test floor. Everybody is ramping SDRAM so demand for these tester is probably fairly high. This is complicated equipment which takes a while to install and has to be integrated with other equipment ( wafer probers, package handlers, ...) so you don't just plug it into the wall and go either. During the conference call, they talked about the ramp of SDRAM wafer starts. The ramp of SDRAM volume into test and assembly will lag wafer starts by several weeks and actual sales lag that. Maybe the test guys have it all under control or maybe they are being buried under a rising tide of SDRAM wafers. If test and assembly are under control, MU should be able to ramp to near 100% SDRAM very quickly. Assuming that they don't have contracts requiring them to deliver EDO... The guys in the factory have been executing really well for the last year so I expect that the next conferece call will indicate that the problem is largely solved looking forward. I would be very surprised if it isn't a significant factor for this quarter though.

To: DavidG who wrote (24199)	11/18/1997 2:53:00 AM
From: Richard Russell	Respond to of 53903

DG, >>As far as "test equipment woes" I don't know where you get the idea I did not want to address. I didn't consider it since I thought that it was resolved early this quarter. There really is no reason to think that b/c they had problems last quarter means every quarter afterwards they will have it. If you are privy to something than just tell us.<< You did not consider it? Do you have some information which you are privy to as to if and when they have solved these problems? >> DELL seems to care since they get their memory from MU.<< How do you know that Dell gets their memory from mu and they get it from mu because of the quality? Please share your source of info on that one too. I'm back. Did you miss me? RR

To: DavidG who wrote (24199)	11/18/1997 3:03:00 AM
From: Trey McAtee	Respond to of 53903

david- first, 4.75 is what i think will be the general ASP will be. actually, i think it will probably be lower, this is just a guess. however, it will be much less than the (i think) 5.50 you qouted. as for testing, i am sure they will sort out the problems, if they havent already. but for a significant amount of the quarter i think it was a big problem. what larry and you are stating are production numbers, not the numbers of units that are actually leaving. much of that SDRAM may not have been tested, so they arent selling it. of course, it enables them to use a great inventory number, but who knows.we wont for sure until the CC. as for SDRAM vs. EDO, i am seeing spreads of no more than $5-7. this will not last since ALL manufacturers are transitioning to SDRAM. heres another good point though that has gotton lost: the asians have been making tons of SDRAM while MU was not. yet ANOTHER reason why the asians were probably making money while MU has languished. one hell of a management team they have up in boise. as for the quality issue, are you REALLY saying that smasung produces lower quality products? THAT is naive. i wasnt saying that no one cares about quality, my point was that no one cares about the brand. and you'll get different opinions about the best manufacturer from everyone. i personally like toshiba and samsung. mitsu is also good. i know the value of quality components in a system. what i think you should do is realize that a brand name does not mean quality. so, you now assert than DELL gets all its memory from MU. whats up with that? good luck to all, trey