David,
Hope you dont mind my comments to some of your questions.
I really like the way you answered the question, I totally agree,
its got to be harder predicting DRAM futures than predicting interest rate changes.
The questions you mentioned:
1)"what COULD happen in 1999 that could be positive for MU...such as the price of 64MB SDRAM with PC100."
My guess is Jan99-$8.50-$9 tops.
2)"Can MU even survive being in this market...or can they possibly
do mediocre...or maybe...can they even flourish?"
MU will do the same as lastt year, and thats shrink
the die faster and get their costs to the lowest in the industry and continue to maintain marketshare. Flourish, no way. PC's are not going to do great nor DRAM so they could hang in there with a profitable DRAM senario, but PC will continue to get hammered, thus dragging MU down.(this is assuming MU can make some profit on DRAM with these shrinks, if not, then they are out of business).
3)"Do you believe the PC100 interface is trivial for DRAM manufacturers with current fabs...or possibly another round of upgrades is a necessity?"
Its not the PC interface thats the problem assuming most are already capable to .28 which is enough to produce PC100. I think its the price pressure going on(price war) and will force ALL to go thru multiple shrink programs to get competitive, or stay competitive, and to do this they will have to upgrades to get to .18um eventually. This will cause more money to be spent chasing after slim to none profits,except for a few.
" ...and if so who really benefits from these requirements...who REALLY suffers? Is Korea winning this race right now...if not do they have the capital to get in the race?"
The ones that are good at it, I have to give Micron some credit on being the king of shrinks last year so Micron can benefit, but it has to be timely, not 6 months after the fact.
Korea winning, if you measure this in marketshare, I say yes Samsung and Hyundai is winning, LG is not. Capital is there or already invested and are already in the race, and more importantly can continue to participate in the race....Toshiba is making a comeback but I really question their commitment to make those ongoing investments.
"How complicated is the manufacturing and testing of these silly little devices?" very tricky, but now most have the kinks worked out, key is good testers and good design, and doing alot of internal and external testing, characterizations, and a good interface with Intel. Small third party guys are even touting they can do it, ie.
Smart, PNY, Kingston and others. They invested quite a bit in testers and effort. Right now I would only trust a module built or overseen by the manufacture of the chips, my opinion and definitely for my machine thats what I will use.
"Can anyone make money on 64mb chips...if so who are they? If not why not? Why would they continue in this business if there is no profit? ...hmmmm...Don't you sometimes ask yourself that question?"
I think everyone is wondering this, I think some think this business runs in cycles was 2 year cycles. supply and demand usually get out whack after the year of intense capital investment,(building new fabs) then the companies back off investing, and the demand catches up and there is a shortage again. unfortunately this time we are into year three, and well 99 looks better than 98.. As far as profits, I had said Micron was the only DRAM company to make a profit last year, but did see that MITS made a little bit, and you have to give TI overall company a profit but I dont think if you added up all the TI-acer R&D invest, and DRAM sales, they did too well, thats why they are making a change. I havent read any summary lately on this, but I am sure someone has an article covering who profited or lost last year.
Why are these companies still in the DRAM business?, when it was sweet(profitable), it was very sweet, and there is still a chance the market could go back to that senario where demand is higher than supply and the possibility of having that profits will happen again. I certainly am not going to predict when that will be. who knows...
"MU management seems reasonably smart, they have almost $billion dollars should they be using that money to buy MSFT stock to improve their profits?"
Why doesnt Micron get out of the DRAM business and the PC business. Sell the companies, take the money and run! I would, and if I was running Gateway, I would sell it too. It looks a bit tough right now for DRAM and PC's..
No clue on the stock, I remember someone saying that they have this feeling. Well, that sounded good, so I have this feeling-- that MU
will perhaps trend up a bit maybe touch 30, and will start dropping
again whenever the market has a negative mood swing. I have to believe the DRAM price war is already factored in by now, but it did not react like I thought, or maybe it hasnt totally finished reacting.??
I would love to hear a bit from the TA side, what resistance levels on the low side and the high side etc.
Heres a question for the group who muddled thru this message:
How will MU react if Intel earnings are treated negatively in the market?
How will MU react if HP and or CPQ earnings are treated negatively in the market.?
Good trading,. |
