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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (37151)	8/9/1998 6:38:00 PM
From: Thomas G. Busillo	Read Replies (2) \| Respond to of 53903

MB, you'd think that some of the sell-side marketing associates like Niles and Joseph would catch on to the pattern or ask some obvious questions. When has a "shut-down" by any of the Asian players ever led to a sustained boost in prices? And given the fact that, at present, the most salient point in the market is that readily-mobilized production capacity still outstrips demand, what is so radically different this time that's going to make the results of this series of "shut-downs" any more successful than they've been in the past? Although the lines themselves may be shut, could it be that somewhere out there the guys on the loading docks are still working? That shutting down lines and stopping inventory from reaching the market are two different things? That some of the players may be "cheating" by attempting to capture part of any minor price increases? techweb.com Dynamic RAM Market Unfazed By Shutdowns (08/07/98; 2:50 p.m. ET) By Jack Robertson, Electronic Buyers' News Most of Japan's chip makers are joining their South Korean rivals in shutting down their Dynamic RAM fabs for one to two weeks of summer vacation, but the reduced output has had an uncertain impact, so far, on market prices. Despite the fact that the likes of Fujitsu, Hitachi, NEC, and Toshiba are in the midst of their annual hiatus, spot prices remain a mixed bag, with most DRAM types halting their slide, and some increasing slightly. Indeed, the sagging DRAM market took virtually no notice when two South Korean companies -- Samsung Electronics and Hyundai Electronics Industries -- closed their lines for up to two weeks in June. More recently, Hyundai closed its lines for a second time at the end of July, while major Japanese memory makers are expected to close their DRAM fabs for six to 10 days this month. The American IC Exchange (AICE), a memory-chip broker based in Aliso Viejo, Calif., said most 64-megabit DRAM versions last week were selling at $7.45 to $9.52, as 16-Mb chips continued to bump along between $1.37 and $2.21. Not every DRAM manufacturer plans to halt production. Micron Technology is continuing to run DRAM lines at full tilt, and even Samsung and Hyundai have said they will keep their new U.S. fabs going without interruption. With the pipeline still clogged with DRAM chips, many analysts aren't surprised the spot market hasn't reacted much. Brokers also said slackening demand from PC and other original equipment manufacturer customers has stifled activity in the spot market, regardless of Asian fab closings. OEM contract prices covering future DRAM deliveries over many months have been only minimally affected by the temporary dip in output from the shutdowns, they added. "We really haven't seen anything result [from the shutdowns]," said Jennifer Bender, purchasing manager at AICE. "It's not enough of a cutback to influence pricing." Byron Walker, a chip analyst at BT Alex. Brown, New York, concurred. "Recent evidence indicates that this month's production cuts are not enough to sustain firm [DRAM] pricing," he said. Even some chip makers doubt their closures will do much to ease the oversupply. Bob Brown, president of Toshiba America Electronic Components, Irvine, Calif., said he doesn't think his company's 10-day shutdown will have much impact on the market. Other chip executives suspect any further shutdowns will likely affect aging 16-Mb DRAMs, which most companies are trying to work down as they rapidly shift to higher-margin 64-Mb devices. Many 16-Mb chips are run on older 6- and 8-in. wafer, 0.5-micron-generation fabs that have been fully depreciated and are better able to absorb production stoppages, they said. Good trading, Tom