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

To: Lee Lichterman III who wrote (41090)	11/27/1998 12:48:00 PM
From: Land_Lubber	Read Replies (2) \| Respond to of 53903

Thanks for the info, Lee. All these threads come together, painting a picture of MU 1. moving quickly to smaller line-widths 2. having poor yields at test 3. resulting in production costs having to spread over fewer units 4. having to honor existing contracts at a price below production cost (recently confirmed by Appleton directly) 5. meaning they make as few as they can get away with, since they loose money on each one 6. So some customers are put on "allocation." 7. Nothing available to sell on the spot market. 8. And they try desperately to raise their contract prices 9. Unfortunately, their competitors are having good yields, and can afford to undercut Micron's price 10. Meaning Micron is loosing contract renewals 11. Plus Korea cranking-up capacity with a vengeance to fill the supply-side "void." This sounds like bad news, doesn't it? But it will actually push the MU stock price even higher! Why? Because they will loose less money than before! Their best strategy would be to just shut down all together, then they would at least break even (just joking!) Oh yeah, there is also the interest to pay on that huge debt! Seriously though, MU is likely to trim its per share losses this way. Also, don't forget that the TI and INTC new shares will dilute the per share losses too! Land_Lubber