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To: DavidG who wrote (26561)	1/15/1998 2:27:00 AM
From: Kathleen capps	Read Replies (2) \| Respond to of 53903

David, From MU's latest 10Q: Average selling prices per megabit of memory declined approximately 44% from the first quarter of 1997 to the first quarter of 1998 and 25% from the fourth quarter of 1997 to the first quarter of 1998. Average selling prices for the Company's semiconductor memory products continue to decline and in December 1997 were approximately 38% lower than in the first quarter of 1998. As a result of the decline in average selling prices, net sales of semiconductor memory products for the first quarter of 1998 decreased by 9% as compared to the fourth quarter of 1997 despite a 24% increase in megabits shipped for the same period......The decrease in gross margin percentage on semiconductor memory products in the first quarter of 1998 from the fourth quarter of 1997 was primarily the result of the approximate 25% decline in average selling prices per megabit of memory, partially offset by lower per megabit manufacturing costs. Depending on your starting number for ASP, the resulting (today's) ASP will differ but MU is saying they are taking huge hits in ASP regardless. Kathleen

To: DavidG who wrote (26561)	1/15/1998 3:46:00 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 53903

dave, now you are asking for some sources. ;-) i've been over this a thousand times already, do you mean gross or net costs? costs alone is a meaningless term. i would not be at all surprised to see mu's gross cost in your range and the net cost in earlie's range. the peddle hits the metal with net cost, which was near $4.50 last q. multiply 100 mil chips times $0.10 and you get $10 mil. $10 mil is about what mu made. their asp was $4.80. net costs would be $4.80-$0.10 = $4.70. muei essentially broke even so their contribution to earnings can be ignored as negligible. their average net cost can reasonably be assumed to be lower next q. how much is where the game begins (assuming people care about eps - and they don't for now).