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To: Richard Russell who wrote (27090)	1/24/1998 4:43:00 PM
From: DJBEINO	Read Replies (1) \| Respond to of 53903

Japanese cutting back on 16-Mbit Electronic Buyers News, Friday, January 23, 1998 at 22:46 by Jack Robertson Seoul, South Korea- Profit pressure attributable to the plunge in DRAM prices is prompting Hitachi Ltd., NEC Corp., and Toshiba Corp. to cut production sharply again on money-losing 16-Mbit chips. The three Japanese companies are rapidly doubling the output of 64-Mbit DRAMs, which are now also losing money but are expected to become profitable as demand picks up and yields increase significantly. A spokesman at Hitachi in Tokyo said last week that 16-Mbit production will be cut 20% in the next two months, to 8 million units monthly. The cutback affects Hitachi's Japanese fabs only, which will stop lines for up to a week in February and March. Hitachi also plans to cut production of SRAM and ROM chips at its Japanese fabs, the spokesman said. He blamed the unprofitable 16-Mbit market for the reductions. Although declining to comment on Japanese press reports that Hitachi would report a loss for its fiscal year ending March 31, he said "it is a very, very serious situation." A Toshiba official in Tokyo last week forecast that the company will see net profit drop 85% to only $76 million for the fiscal year ending March 31. Toshiba's net earnings for the previous year were 125 billion yen, equivalent to $1.25 billion at the year-ago exchange rate or $900 million today. As a result, Toshiba is delaying construction of a fab in Kyushu, Japan. Construction, which was originally to begin this year, may be delayed until 2000, and production may not start until 2002. NEC will scale back unprofitable 16-Mbit output by starting next month to shift all 16-Mbit production from its United Kingdom and Japanese fabs to Roseville, Calif. Fabs in the United Kingdom and in Hiroshima and Kyushu, Japan, will produce only 64-Mbit DRAMs on a 0.25-micron process, a spokeswoman said. In the shift, NEC expects to ramp up total 64-Mbit production from the current level of 3 million units per month to 6 million per month this summer. The spokeswoman said all 64-Mbit parts will be made on 0.25-micron lines, which are expected to yield up to 400 die from an 8-in. wafer. NEC is also cutting its earnings expectations. Analysts believe 400 die per 8-in. wafer is the minimum level needed to be profitable at the $13 to $16 range for the next-generation memory chip. Fujitsu Ltd. plans by midyear to cut its 16-Mbit production rate in half from the current level of 7 million units per month, a spokesman said. At the same time, the company hopes to ramp up 64-Mbit DRAMs to 3 million units per month this year.

To: Richard Russell who wrote (27090)	1/25/1998 4:16:00 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 53903

>>Even if we don't build any new fabs for the next two years, DRAM prices will not rise - we have that much over-capacity right now.<< amen...

To: Richard Russell who wrote (27090)	1/25/1998 9:15:00 AM
From: Earlie	Read Replies (1) \| Respond to of 53903

RR: For some reason, this has a ring of familiarity to it. (g) Normally most intelligent investors are (or ought to be) nervous when short, (especially if there is a big short position). This is as it should be, and tends to keep one agile. The neat thing about MU is that it has been driven up relentlessly by the momentum types, without supporting fundamentals. When the fall comes, it will be precipitous. My thinking up until the last two days has been to continue to slowly "scale" into a MU short position ("nibble"), The possibility of a short squeeze - short panic has been the primary reason for that stance. Once underway, a short panic usually continues until the supply of "cannon fodder" (frightened shorts) is exhausted, and a stock price can really take on some momentum as we all know. From my perspective, those who can't take the heat are probably now out. The rapid rise in the short position and the volume shift, smacks of a more professional and deeper pocketed involvement. With the unfortunate current political events now beginning to underline the fact that a semi bankrupt IMF is not going to receive significant funding with which to bandaid S.E.Asia, (it would never have come close to being enough in any event), the markets will begin to discount a spreading of the Asian contagion. Can't think of a better place to be, (except perhaps YHOO), as the weather worsens. (g) Best, Earlie