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

To: Skeeter Bug who wrote (37634)	8/19/1998 12:50:00 AM
From: DJBEINO	Read Replies (3) \| Respond to of 53903

10:30am EDT 17-Aug-98 Montgomery Securities (J. Joseph 415 627-2925) MU DRAM and Microprocessor Pricing Update NATIONSBANC MONTGOMERY*NATIONSBANC MONTGOMERY*NATIONSBANC MONTGOMERY DRAM AND MICROPROCESSOR PRICING UPDATEAugust 14, 1998 SEMICONDUCTORS Jonathan Joseph (415) 627-2925 First Call Claude Hazan (415) 627-2845 DRAM prices uptick once again. We found in our weekly survey Friday that 16Mb 2Mx8 SDRAMs rose 21% on the week, while 64Mb 8Mx8 SDRAM's rose another 9%. The increasingly mainstream 64 Mb PC100s (100MHz) rose 2%, while the less mainstream 16 Mb 4Mx4 EDO rose another 14% over last week's prices. Recent production cutbacks and fab closures, coupled with increasing PC demand have had the cumulative affect of DRAM spot prices rising for the third week in a row. This trend may be sustainable over the longer-term given severalfactors: o Shrinking DRAM inventory levels and increasing lead times indicate demand is solid. We believe inventory levels at all manufacturers have dropped sharply in the past months as seasonal demand and PC inventory replenishment has picked up. o The shift to 64 Mb PC-100 DRAM components is becoming increasingly necessary as PC manufacturers push high-end (P-II 300-450 MHz) models. These high-end machines require faster memory and the PC-100, which is currently selling at a 5% premium, is filling the need. PC-100 output still falls short of total potential demand. o Financial strains on Korean DRAM producers will inhibit the capital expenditure necessary to advance their manufacturing processes to the next level of die shrinks. This should give Micron Technology (MU, $33-3/16, BUY) a strategic advantage as the company has gradually shifted to a more advanced 0.21-micron manufacturing process over the last few quarters. Ultimately, the winners and losers in the DRAM market may be decided by their access to capital. o The increased need for memory. The average memory level per computer has increased from our 1997 estimate of 29MB to 53MB in 1998 and could be revised to 64MB of DRAM per computer by year end. The proliferation of a new generation of NT software will only fuel the future growth of the memory market. Intel processors still selling at premium. Average selling prices have maintained an 11% premium to list pricing, in line with our survey two weeks ago. As we would expect, high-end models (PII-400, 350, 333) have moved to parity or a slight discount to list, while models which the company is trying to take off of the market (PII-300, 266, P233MMX) have moved to higher prices. This indicates that marginal demand remains strong. Recent PC-66 DRAM Pricing 16 Mb 64 Mb 4Mx4 EDO 2Mx8 SDRAM 4Mx16 EDO 8Mx8 SDRAM Price % Change Price % Change Price % Change Price % Change 6/1/98 $1.55 $1.69 $8.72 $8.00 6/5/98 $1.55 0% $1.69 0% $8.72 0% $7.84 -2% 6/12/98 $1.55 0% $1.49 -12% $8.83 +1% $8.34 6% 6/19/98 $1.55 0% $1.49 0% $9.23 +5% $8.64 +4% 6/26/98 $1.50 -3% $1.53 +3% $8.78 -5% $8.27 -4% 7/6/98 $1.44 -4% $1.44 -6% $8.98 +2% $8.11 -2% 7/10/98 $1.44 0% $1.44 0% $8.81 -2% $7.98 -2% 7/17/98 $1.44 0% $1.44 0% $8.60 -2% $7.88 -1% 7/24/98 $1.44 0% $1.44 0% $8.45 -2% $7.83 -1% 7/31/98 $1.49 +4% $1.78 +24% $8.64 +2% $8.68 +11% 8/7/98 $1.65 +11% $1.78 0% $8.64 0% $9.13 +5% 8/14/98 $1.88 +14% $2.15 +21% $8.64 0% $9.91 +9% Source: NationsBanc Montgomery Securities LLC, American IC Exchange Recent PC-100 DRAM Pricing - 64Mb 8Mx8 SDRAM 16Mx4 SDRAM Price % Change Price % Change 7/13/98 $9.50 7/17/98 $9.59 1% 7/24/98 $9.59 Flat 7/31/98 $9.59 Flat $9.80 Flat 8/7/98 $9.69 1% $9.80 Flat 8/14/98 $10.00 +3% $9.95 +2% Source: NationsBanc Montgomery Securities LLC, American IC Exchange Intel CPU Spot Pricing Jan-98 Feb-98 Mar-98 Apr-98 May-98 June-98 Jul-98 Aug-98 PII-450 $755 PII-400 $833 $804 $720 $621 $585 PII-350 $626 $590 $515 $428 $392 PII-333 $850 $738 $643 $505 $486 $412 $324 $312 PII-300 $728 $516 $499 $362 $345 $295 $233 $263 PII-266 $503 $372 $363 $233 $246 $201 $201 $219 PII-233 $279 $278 $256 $203 $185 $167 $187 $182 Celeron - 300 $175 $121 $111 Celeron - 266 $182 $160 $102 $90 $86 Pent233MMX $271 $191 $191 $133 $126 $116 $140 $147 Pent200MMX $203 $124 $124 $103 $101 $104 $128 $139 Pent166MMX $115 $102 $101 $94 $96 $88 $100 $108 Premium/Discount to Intel List Price Jan-98 Feb-98 Mar-98 Apr-98 May-98 Jun-98 Jul-98 Aug-98 PII-400 1% -2% 0% 5% -1% PII-350 1% -5% -1% 1% -7% PII-333 18% 2% 10% 3% -1% 0% 3% -1% PII-300 37% -3% -6% -3% -8% -3% 11% 26% PII-266 34% -1% -3% -5% 0% 2% 26% 38% PII-233 4% 4% -4% 3% -7% 4% 16% 13% Celeron - 300 10% 8% -1% Celeron - 266 17% 3% -4% 5% 0% Pent233MMX 40% -1% -3% -1% -6% 9% 32% 39% Pent200MMX 65% 1% 1% 9% Pent166MMX 21% 7% 6% -1% Total 31% 1% 0% 2% -3% 2% 12% 12% P-II's 23% 1% -1% 0% -4% 0% 11% 11% Message 5530729