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To: SKIP PAUL who wrote (38776)	9/22/1998 12:12:00 AM
From: Estimated Prophet	Read Replies (2) \| Respond to of 53903

<< Fewer suppliers means higher prices!>> I just can't sit by and read this "logic" without comment. How many fewer suppliers will there be, and when? How do you know that those fewer suppliers will be able to maintain price stability and prevent the entry of new suppliers/reopening of mothballed fabs. History and basic economics tells us that any such effort would be short-lived. Of course, if it does happen, then there would be great profits for those investors who could predict it. Problem is, it ain't gonna happen, now or in the foreseeable future. Your statement belies simple economic logic of commodity production oligopolies. The truth is that supply/demand imbalances are the one sure way to ensure new investment in production capacity and new price pressure. Think about it: if you and 24 friends can get together to corner the market on widgets, you invite new entrants, and maybe you are enticed to cheat just a bit on the pricing regime. Now assume that you reduce the number of friends in the industry to 10. Have you solved your problem? Are the ten of you any more able to keep each other from cheating on your allotments? NO WAY SKIP!!! If you can explain to me how the DRAM circle of friends could get down to 3 or 4, then maybe, just maybe they might eke out a windfall profit for half a year or so. You need to read and think hard about what MB, SB and others say about this industry. If you are a trader, who cares. But if you are an investor, you ignore their reasoning at your peril!! BWTFDIK

To: SKIP PAUL who wrote (38776)	9/22/1998 2:31:00 AM
From: Trey McAtee	Respond to of 53903

skip-- really. and arent these fewer players more efficient in terms of production for example, not to mention capital expenditures for increased production. the thing i keep hitting is that it really is better for a company like MU to have a few big competitors, and tons of smaller ones instead of having a few, well diversified big ones. but see, thats just one problem which we need to look at from another angle... not only are they able to make money off of other enterprises, they are also able to expand and cut costs at least on par with MU. this is the really disturbing thing...since one of the few things that allows MU to command an equity premium is the 'low cost producer' BS. but, if these caveats arent enough...think about one other thing. throw all the DRAM per PC projections out the window if DRAM pricing increases much more. it wont happen. you will start hearing chapter and verse about how win95/98 maxes out at 32MB, and the PC makers will stop adding such copious amounts of DRAM. doubt me? remember those first pentiums at 60Mhz with a (for the time) whopping 8MB of DRAM? good luck to all, trey