To: Trey Yon who wrote (1621 ) 12/16/1997 10:47:00 PM From: Samuel R Orr Respond to
I was sufficiently fortunate to catch TJ's interview this morning on CNBC. His explanation on the $5M lost on foundry business was plausible, but whatever problem their Round Rock, TX fab had building SRAM wafers to augment the Minnesota fab was pretty nebulous. It sounds as though they tried to make die(.35 micron line widths?) in Round Rock, ran into problems there, and failed to get them overseas in time for assembly and test to make the quarter. His comment that 256K SRAMs were selling for 88 cents, and that Cypress' job was to build them for 44 cents to obtain a fifty percent margin was depressing. It's been a long time, but making, assembling, packaging, and testing the part for a buck seems dicey to me. I'm glad somebody else is doing it now. TJ didn't spill the family jewels, and kept a stiff upper lip. It didn't hurt the stock's price today, and might have helped. Being a realist with little vision, I can take one cent, multiply by four to get four cents, multiply by fifteen for a P/E multiple, and come up with a sixty cent stock price. Fortunately, all the analysts and traders have vision. Let's hope they never lose it. Micron seemed to save the day when it missed analysts' expectations of seven cents by coming in with four cents. They punished it by raising the price a buck or so. Incredible! After that, who cared? Korea looks awful to me, but I'm relying on news reports. Long-term, they won't be able to subsidize their semiconductor memory companies as much as they were, and SRAM prices may move up. Well, I bought some more at $7 3/4, and will be waiting for seventeen bucks again. Let's hear more of that equities wisdom, Trey Yon, and we'll watch the play together.
