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

To: Dave Gahm who wrote (42104)	1/9/1999 2:01:00 PM
From: PAinvestor	Read Replies (1) \| Respond to of 53903

Dave, The arguments that I present are basically supply related. That current capex in leading edge technology is insufficient for total global bit demand in the the coming 12-18 months. The boom/bust characteristics of the silicon cycle is unchanged. The main driving factor is changes in capex, not fluctuations in demand (though that plays a more minor role). Capacity that was build 12-18 months ago is now obsolete. It cannot produce leading edge products that are demanded. You cannot mass produce a PC-100 64meg SDRAM chip unless you have sub-0.25micron lines, high yields, a chip size of less than 100mm2 and expect to make money. You can count chip makers globally that can do that on one hand. Alot of those lines have been converted to logic and cannot be easily switched into memory without significant retooling and significant cost. That is where a shortage has developed. It takes time and money to retool lines. More importantly if you do not have the technology, you lose money and you drop out. The Koreans now understand this and realise that they too have to make money. There will be no "flooding" of the the market this time. Making chips below 0.25micron is a different game. By the way, fact that chip prices have remained steady (slightly rose on the case of high end 64meg) for the last couple of months is an effective price rise. Chip shrinks mean that those that are successful in shrinking and raising yields are seeing their costs drop whilst prices remain firm. Even if prices began to tick down again (which logically, they should considering learning curve pricing) those that can shrink will make money, and lots of it. I include Micron in that group. Basically, I think MU has more to go, they haven't really announced anything in the way of earnings surprises yet, and I think there will have to be some "survivor premium" on the company. Besides all this optimism seems to be spilling over into lagging tech stocks from the internut plays. I'm still holding long.

To: Dave Gahm who wrote (42104)	1/9/1999 2:20:00 PM
From: Fred Fahmy	Read Replies (1) \| Respond to of 53903

Dave, < I still think it is an important clue because of Johnson's experience and track record as a semiconductor business prognosticator.> Keep in mind that this is the same Carl Johnson that I debated with fiercely on SI several years ago when INTC was in the high 20's. He was trying to convince people what a bad investment INTC was because Cyrix (remember that company LOL) and AMD were going to put the hurt on INTC big time. Enough said. FF

To: Dave Gahm who wrote (42104)	1/10/1999 8:29:00 PM
From: Proud_Infidel	Read Replies (3) \| Respond to of 53903

Dave, but don't you think MU at $64 has already discounted the best case scenario, and then some? Personally, I have no idea where DRAM pricing will be 6 months from now. But one must look seriously at the $500M investment INTC made in MU. Why invest in an unprofitable business with overcapacity? Craig Barrett & Co are extremely bright and I believe they saw the turn in DRAM before anyone else and, through their investment, have secured themselves an ample supply in case of any DRAM shortage that may occur this year. BK