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

To: Bipin Prasad who wrote (41688)	12/24/1998 10:16:00 AM
From: Carl Held	Read Replies (1) \| Respond to of 53903

"Sell" rating on stock.... 09:12 ET Micron Technology Inc. (MU) 54:--Update-- Needham & Co raising estimates, after DRAM maker posted a narrower-than-expected quarterly loss. Says qtr benefitted from cost controls and strong pricing. However, firm believes issue currently overvalued given earnings prospects. Needham maintains its "sell" rating on the stock. MU shares trading about 1 1/2 pts higher in 3rd-market.

To: Bipin Prasad who wrote (41688)	12/24/1998 10:19:00 AM
From: DJBEINO	Read Replies (2) \| Respond to of 53903

Chip Unit Merger Gives Positive Signals 12/24, 18:23 There have been numerous questions surrounding the merger of the semiconductor divisions of Hyundai Electronics Industries and LG Semicon, but most of them have not been put to rest as HEI yesterday emerged victorious. Among the questions was whether or not the merger made sense, particularly when considering the unique nature of the dynamic random access memory market, but it appears that the new company will have to just move forward. There are still concerns. Many question whether or not the new company will be able to balance their corporate cultures and focus on their synergy effects to maintain and enhance their international competitiveness. If anything, it is certain to send out positive signals to foreign businesses and investors that have been wary of Korea's commitment to its restructuring and reform programs since it appears that all the talk is for real. Even though LG is protesting against the ruling, there is really no way that it can operate its multi-trillion-won business without financial support from domestic banks and it remains to be seen how long it can hold out. For one thing, LG's statement following the release of the ADL recommendation was toned down from its earlier position which reportedly indicated that it will accept any action taken by the government and creditors. To be sure, there are other problems to be solved. The merger will create a colossal a company with some 18 trillion won in assets and debts to match. The merger will certainly result in major layoffs. However, HEI officials insisted, there are greater synergy effects. ''Over the next five years, the merger will make it possible to realize savings of $2.5 billion in investments for 12-inch wafer processing facilities. ''We are estimating we would be able to spend $2 billion less in investments for research and development and $1 billion less in administrative and marketing costs,'' said HEI president and CEO Kim Yong-hwan. In addition, he said in a recent meeting with reporters, the two companies will be able to advance the development of new products by six to 12 months and make it possible to increase the production of high value-added chips. With their combined market share of 17.7 percent in 1997, it is next only to Samsung Electronics with its 18.8 percent. But, in terms of the production capacity, the new company will be the largest with nearly 240,000 8-inch wafers per month, much larger than Samsung's 163,000. On the other hand, the merged company will have to take into consideration the fact that computer makers do no make a habit of making large purchases from a single company, meaning that it may not be able to maintain its market share. It will also have to handle double the pressure on what it will do with new manufacturing facilities in Wales and Scotland which have been on hold since the outbreak of the financial crisis of the end of last year. Fortunately, market prospects are in its favor. International forecasts indicate that demand for DRAM chips will begin to increase from next year and prices have been picking up. ''In the past, reduction in production for controlling prices were suspected as collusion, but with the merger HEI and LG have a freer hand at controlling their production volume,'' one industry official said. Pros and cons aside, the most important aspect of the deal, if it does go through, and it probably will, he projected, will have a major impact on international confidence in the Korean economy. ''This is probably one of the most significant developments in corporate restructuring this year. With the government and creditors playing their roles, chances are that LG will have to accept the verdict,'' he added.