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

To: Knighty Tin who wrote (39337)	9/29/1998 1:22:00 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 53903

MB, I haven't taken the TI deal into account because I don't know all the details and I can't estimate its effects. My gut feeling is that the deal is very positive for MU. I also wonder if the deal is getting much cheaper for MU due to the recent stock run up. As for DRAM prices, I do believe that two years from now, they will be higher or near today's prices. As I've been mentioning elsewhere, recessions are caused by inventory gluts. Depressions are made from excess capacity to produce. The corollary to this is that depression ends when enough producers go bust or exit the business. Until that happens, the prices will be artificially low (i.e at a loss to the producers) and will have no upside. The most important thing in these situations is to survive. The winners will collect all, including substantial pricing power. To that end, it does not matter where the money comes from (business deals, government help, debt and equity markets...) so long as it comes enough to help you survive to the end. As an investor, you just sit back and let them slug it out. Once their down to a few, buy them all, regardless of the price. The risks are well worth the rewards. The most significant item in Carl's CC summary was that (according to Micron) DRAM spending will be $4B of which $2B will be from MU (upgrading theirs and TI's fabs). I found this hard to believe. Still, if I was the CEO of another DRAM company, I'd have a hard time sleeping at nights just thinking about this prospect. Out spending your competition at the trough, is a very aggressive and effective way to knock them dead. Sun Tzu

To: Knighty Tin who wrote (39337)	9/29/1998 10:14:00 PM
From: Carl R.	Read Replies (3) \| Respond to of 53903

Mike most DRAM makers are not adding capacity. Remember that we are making a conversion to faster memory such as RDRAM, etc, which requires 30% more transistors, which is about a full generation of shrink. Thus all DRAM makers will need to shrink an average of more than one generation in order to see increases in numbers of bits. Some such as MU are moving forwards two generations, others are closing older fabs. As for the TI operations, during the upgrade operations their output of memory will significantly fall for a significant amount of time, which will reduce the available bits until such time as they are ready to roll, which should be at least 9 months. Carl