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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (25457)	12/15/1997 11:57:00 PM
From: Estimated Prophet	Read Replies (1) \| Respond to of 53903

SB <<did they explain how it is good business to spend $5 a share on equipment for 16 mb dram to earn $1.07?>> remember the guy who held a quiz on this thread a while back...the question was introduced by a statement to the effect of "mu will not spend 7.50 to make 1.00"?? to my recollection, after a bunch of hints and a lot of wasted time reading everybody's guesses, there never was an answer. could that be because there wasn't one? your question reminds of that "quiz"---can you explain the answer?;-) brian wright

To: Skeeter Bug who wrote (25457)	12/16/1997 12:15:00 PM
From: Ed Beers	Read Replies (1) \| Respond to of 53903

Skeeter, I think that Micron's ASP will be dominated by SDRAM. EDO pricing has been pressuring SDRAM pricing but, given a general consensus that EDO pricing in now below marginal production costs, I don't expect this to continue after inventories have been reduced. The $5 dollars to earn $1 is easy. Don't forget that depreciation is not a real current expense. It is an accounting fiction to show that you have to pay off the $5. MU has been making a profit after depreciation. Now you could argue that the depreciation schedule for semiconductor equipment (specified by the IRS) is to long and causes depreciation to be understated. You might also take issue with not depreciating Lehi since it is not in service. I don't think it is fair to say that equipement costs are being ignored. Ed