Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Carl R. who wrote (42132)	1/10/1999 11:38:00 PM
From: MileHigh	Respond to of 53903

Carl, I have heard though that the DRAM market could be entering a period of product differentiation with closer OEM/Manu relationships due to the BTO infrastructure being put in place. That is, an OEM might pay a bit more from that manu that can satisfy their needs on a BTO basis. My theory is that as the OEM eliminates (pushes down) much of the cost of holding inventory to the Manu/ECM, a certain portion of that cost saving will need to be recouped by the supplier in the form of higher prices because these suppliers will be forced to match production time with OEM demand (A more expensive proposition than turning out product at will). I think they will need to work together VERY closely and a savvy OEM might pay a bit more for pieces from that supplier who best understands and satisfies its needs!? Maybe this is utopian, but with the advent of BTO it would seem that in this environment OEM's can not expect to just call up a supplier and expect immediate delivery. Look what is supposedly happening now with DRAM... I suppose I am arguing that as the OEM's take costs out of the supply chain, those firms that will thrive will be those that provide a value added service as opposed to a price driven service.... Don't misunderstand, I know DRAM will always be price driven to a certain extent but I think that after this BTO model has run through a few cycles, the sharp OEM's will come to rely on those firms that help them manage inventory costs, even a "slightly" higher cost as opposed to being "out of stock"...what's that cost? Just thinking. MileHigh