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

To: Sun Tzu who wrote (39352)	9/29/1998 10:33:00 PM
From: Carl R.	Read Replies (3) \| Respond to of 53903

It was probably my error for which I apologize, but I believe that the expenditures budgeted for MU were $800 million to $1 billion for MU this year, and $1 billion for TI over the next 3 years, not all in one year. I am not familiar with all of the details of the TI deal, but TI will provide MU with a loan, which will pay part of the cost of upgrading the TI fabs. Also a couple of the TI fabs are joint ventures, and the joint venture relationship will stay intact, and the joint venture partners will have to come up with much of the capital to upgrade the fabs. I am not clear, but I believe that the $1 billion is what MU will have to come up with, and not the total upgrade cost. Presumably the TI cash will get the process started, and MU won't need to use its own money until next year. MU currently has depreciation of a shade over $600million per year. That combined with their $250 million on hand and the $100 million tax refund should fund the continued expansion, so long as they don't lose to much in the meantime. Even if they lose another $200 million over the next 12 months (which I don't think they will) this would still supply them with $750 million, so they should be fine for at least 12 months. I agree with your point that MU will account for a substantial portion of DRAM investments over the next 12 months, and that they will be in a good position going forwards. I also agree that the stock no longer has upwards momentum, and the huge call position, and the month of October have me spooked, so I bailed out this morning at 32. I am looking to re-enter in the 20's. Good luck, Carl