To: Lucretius who wrote (34321 ) 6/4/1998 12:31:00 AM From: Skeeter Bug Respond to
lt, nice post. it highlights many things i've been trying to explain to the cement brick longs for some time. Despite the attrition, more chipmakers will likely stay in the market longer than necessary. Many will take losses for now in anticipation of the next upswing. folks like dj hang their hat on the next upswing not knowing the coat guy is picking his pocket ;-) this is so basic to economic behavior - and ALL behavior is economic (cost/benefit)."It is very difficult to make money," Giudici said. "Overall demand for memory remains healthy, but on the supply side there is an overhang of capacity." demand for dram continues to remain strong - kip retard, 1997 before the pricing crash. now, how did he know the longs knew nothing about economics? oh, they owned his stock ;-) demand is nothing. supply and demand is EVERYTHING. too bad it took some bulls a lot of tough love to learn this very difficult concept. well, actually, it isn't difficult. just to those with iqs slightly smaller than their shoe size ;-)Part of the problem, he noted, comes from corporate strategy. The current pricing situation has led a number of manufacturers to suspend production, and smaller companies can be expected to abandon the market. ok, let's pick the smaller companies. who votes for toshiba? samsung? hyundai? the taiwan government? micron with an ugly balance sheet. oops, my fault. an unbalance sheet ;-) somebody has to go...Recovery will begin to occur when the supply more accurately reflects demand. A shift to a more advanced manufacturing process will also help, he added, by cutting costs.
