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To: DJBEINO who wrote (3480)	6/27/1998 2:54:00 PM
From: DJBEINO	Respond to of 9582

Rising water By Richard Wallace Is Texas Instruments' exit from the DRAM business the high-water mark of a massive memory-market restructuring, or is it the first indication of a larger, more-ominous storm surge building in the electronics industry? It's hard to imagine TI without a memory business and vice versa. For years, DRAM manufacture defined the semiconductor-technology learning curve: It was the device category on which manufacturing organizations developed and shook out design and production processes, and on which the corporate side established marketing and financial discipline. And TI, more than any other company, learned and applied those lessons the hard way. With characteristic Texan swagger, it managed to hang on long after DRAM's vagaries had defeated lesser entities. Through a complex web of business and technology partnerships, involving such companies as Singapore's Tech Semiconductor and Japan's Kobe Steel, TI led the way in demonstrating how to manage the complex vicissitudes-and share the resultant risks-of manufacturing the single most important price-sensitive commodity in the electronics food chain. Indeed, TI's engineers wrote the book on manufacturing-risk management, with special chapters devoted to the intricacies of intellectual-property economics and the labyrinth of patent law. But even the ornery TI was forced to turn tail when confronted with Wall Street's obsessive-compulsive fixation on short-term gains. TI's retreat from DRAMs may be its own high-water mark. No longer slave to a price-sensitive commodity business, TI becomes the first DSP pure-play on Wall Street. And it leaves Micron Technology to slug it out with DRAM competitors in Korea, Taiwan and Japan. One wonders what Micron has that TI lacked. But there's one thing Micron certainly will not have, and that's the luxury of patient financial markets. Wall Street has nothing against DRAMs per se. What it dislikes are high-volume, high-risk businesses with paper-thin margins and complex Asian and global market exposure. In that regard, the PC may not be too far behind the DRAM curve. What will hold back the storm surge? Copyright r 1998 CMP Media Inc.