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Technology Stocks : MEMC INT'L. (WFR -NYSE) The Sleeping Giant? -- Ignore unavailable to you. Want to Upgrade?

To: olduvai5 who wrote (3788)	9/4/1998 7:01:00 PM
From: Scotsman	Read Replies (1) \| Respond to of 4697

You might be right about plants that have simply idled production for a while coming back on line, although you can bet your bottom dollar that their management will be looking very hard at the profit margin less DRAMS bring in and may just decide to let it ride. But there are quite a few plants that have just quit making them. From my limited understanding, once a plant is shut down you just don't go turn it back on. For example Fujitsu To Close UK DRAM Plant Immediately 09/04/98 TOKYO, JAPAN, 1998 SEP 4 (NB) -- By Martyn Williams, Newsbytes. Fujitsu, Ltd. [TOKYO:6702], has announced plans to close its DRAM (dynamic random access memory) plant in Newton Aycliffe, north-east England as of today. The closure of the factory, which employs 570 people, is in reaction to a collapse in the DRAM chip market. "The decision to close the Durham Plant is a painful one, and we do so soberly and with sincere concern for those who will be affected," said Takamitsu Tsuchimoto, executive vice president and head of Fujitsu's electronic devices group. "Production at the plant will end today," a spokesman told Newsbytes. "It will close in December and a small staff will be employed to maintain the plant until the end of February." Fujitsu says it will begin looking buyer or partner for the facility. Closure of the plant signals Fujitsu's exit from the 4 megabit and 16 megabit DRAM market, where prices have collapsed as oversupply and a fall in demand hit the market. It will also scale back 16 megabit DRAM production at its plant in Japan, concentrating on production of 64 megabit DRAM chips in Japan and Oregon, U.S.A. The news comes at a time when Japanese DRAM manufacturers are scaling back overseas production because of the bad market conditions. Earlier this week, Hitachi announced plans to idle its Texas DRAM factory, with the loss of 500 jobs. Like the Fujitsu plant in the UK, it was making chips using what is considered low-technology today. This is just an example. There have been quite a few over the past 6 months. Since this is a very dynamic market, I just don't know if the oversupply is really as long lasting as it appears. Cyclical companies and products always tend to go overboard at the tops and bottoms of the cycles, either adding way too much capacity or cutting too much off. Personally I think this is pretty good news overall longterm.