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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: zsteve who wrote (23643)	8/31/1998 3:47:00 AM
From: KLINVESTOR	Read Replies (1) \| Respond to of 70976

Zsteve, I bet the apple seller would prefer $19 instead of $10 no matter what but the bigger question is $19 where it stops rising or does it signal the beginning of a trend? For the equipment makers, the bigger issue is at what level must prices firm to when equipment orders make sense. The DRAM market is extremely interesting to watch as it is a classic commodity business but with much more compressed cycles than oil, grains, or in your case apples. When excess capacity exists in a commodity business the prices drop until a balance is reached. Because the equipment is the big outlay for the fab then when prices fall there may be no return on the equipment investment but it is hard to justify shutting down the fab since marginal costs are relatively low. The reverse is also the case as happened in 1994-5 when Micron just printed money. Demand exceeded supply and new capacity takes time to add. We can all be historians, and or make apple math wizards, but the bigger issue is predicting what/when markets will turn and establishing what might be a good leading indicators. Any thoughts on timing and or indicators for a recovery since obviously you give little importance to the recent DRAM price increases?