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

To: 16yearcycle who wrote (25543)	10/21/1998 12:18:00 AM
From: Katherine Derbyshire	Respond to of 70976

"Irrational" capacity builds to gain market share have been a semiconductor fact of life since at least the late 80s, and figured prominently in the 1997 "boom". That's one reason why the market is prone to such wild swings. In chess, one should never assume that an unexpected move is a blunder. Instead, one should try to figure out why it made sense to one's opponent. Similarly, a useful exercise for the investor/student might be to assume that both Micron and Samsung are in fact run by rational, though highly competitive, businessmen, rather than spendthrift lunatics, and to try to figure out why they have different ideas of "rational" behavior. I would guess the answer would have something to do with differences in cultural measures of business success, and with the fact that Samsung is much more broadly diversified than Micron. The fun and potentially lucrative part is trying to use this analysis to predict actual capital expenditures. (Public pronouncements don't cost anything.) Good luck, Katherine