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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (13722)	12/21/1997 4:14:00 PM
From: davesd	Respond to of 70976

Ian...MU's average ASP last quarter was about $4.90 per chip....16M EDO is now selling for $2.50...that's a 50% drop in one quarter. MU is known to be the lowest cost producer of DRAM and they barely made 4c last quarter. The price of 64M EDO is coming down just as fast as the 16M....currently it's in the mid teens for a 64M chip....soon price crossover will happen and everyone will bail out or the 16M business and dive into the 64M business and guess what will happen to that price. Currently, 32MB is pretty standard on PC's and a move to 64M may happen soon (why?? I don't know, lets just assume it does)....even then there is no need for a 256M chip for PC's...so the buck stops at 64M for awhile. SDRAM prices are still 20% higher than EDO....that is because they are harder to make...soon those problems will be worked out and SDRAM will go the way of EDO. What this industry needs is a break from expansion.....demand has to catch up with supply. The recent IMF report suggests that world growth is slowing...so don't expect a boom in PC sales to absorb the excess supply. 64M may be barely profitable at current prices...but in a few months those profits will disappear too. My guess is that some companies will get out of the DRAM business and fab growth will slowdown to a grind in 1998. This will set up a DRAM shortage some time in the future and we will experience an upcycle. dave

To: Ian@SI who wrote (13722)	12/21/1997 7:40:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

With all of the BEARIHNESS out there at the present, I thought it would be nice to look at the facts and assess our current situation. In an article from Electronics Business Today in July(I believe) talking about the state of the semi-equipment industry, there is a table listing 13 fabs costing at least $1.5 billion being constructed. Does anyone know which, if any of the fabs, have been pushed back?? IMHO, there is too much "i think this" and not enough quantitative analysis of reality. It is in this type of environment which BEARS can spread their panic w/o any type of ratiocination. However, also IMHO, at the present time this is exactly what is needed. Thirteen $1.5 Billion-Plus Fabs Construction Plans, 1997-1999 Company Location Year Cost (billions) Advanced Micro Devices Dresden, Germany 1999 $1.5 Advanced Semi. Mfg. Shanghai, China 1998 $1.8 Hyundai Dunfermline, Scotland 1998 $1.7 Intel Leixlip, Ireland 1998 $1.5 Intel Kinyat Gal, Israel 1998 $1.5 LG Semicon Newport, Wales 1998 $1.6 LG Semicon Chongiu, South Korea 1998 $1.6 Motorola West Creek, VA 1999 $1.5 NEC Electronics Kumamoto, Japan 1999 $1.5 Samsung Kiheung, South Korea 1998 $1.5 Texas Instruments Avezzano, Italy 1999 $1.5 Texas Instruments Dallas, Texas 1997 $1.6 White Oak Semiconductor (Motorola/Siemens) Richmond, VA 1998 $1.5 Source: Strategic Marketing Associates TIA, Brian