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To: PAinvestor who wrote (42096)	1/9/1999 1:17:00 PM
From: Dave Gahm	Read Replies (3) \| Respond to of 53903

PA, I offered the Carl Johnson comment as-is, a take it for what it's worth bit of data. He did not mention what companies his "DRAM buddies" work for nor did he quantify "astronomical", but I still think it is an important clue because of Johnson's experience and track record as a semiconductor business prognosticator. You say "what you see is not what you get" and I agree, but I would argue that surprises go both ways and that the current consensus forecast for boom times ahead may prove to be totally wrong, only time will tell. I think there is a lot of conflicting evidence right now and a rational case can be made in either direction. On the demand side I read about the great demand for PC components, but then turn the page of the paper and see ad after ad offering the biggest discounts and lowest prices ever seen for PCs. If PCs are selling so well why the discounts and cut-rate financing? And are all these bargain PCs soaking up future demand? Who wants to pay full price when they have been trained to wait for the sales? Y2K seems to me to be a huge question mark. The company I work for is spending little on PCs and is focusing Y2K money on mainframe and process control. Only the oldest PCs can't be fixed by a BIOS update, and many of those are only running apps that don't care what year it is. On the supply side there has been a lot of capacity removed, but much of that is temporary and will be back soon. It seems to have been little noticed that MU has, in effect, shut down all of the capacity purchased from TXN. Their bit production was only up 10% for the quarter, an amount expected from Boise alone. But as all the bulls here have assured me, and I agree, MU will be bringing this capacity, and much more, back on line as quickly as is possible. The Koreans were restraining production, but most sources (except MU) indicate they are now ramping production as fast as possible. I don't see all this adding up to a shortage and higher prices, stable prices would even seem optimistic. Granted, this is a market that cares little for such old-fashioned concepts as earnings and cash flow, but don't you think MU at $64 has already discounted the best case scenario, and then some? Regards, Dave