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

To: Earlie who wrote (42689)	2/3/1999 3:13:00 AM
From: Ed Beers	Read Replies (2) \| Respond to of 53903

Earlie > - PC base memory requirements are largely driven by applications. No new applications suggests that the current efforts by some suppliers (especially the local cloners) to stuff the memory slots may not be a long term trend. < I have seen some numbers lately indicating the the average pc is going out the door with 128 Mbytes. While this sounds too high to me, it is bad news if true. There are almost no applications that benefit at all by having more than 64 Mbytes never mind requiring more. If DRAM prices were to rise, it seems possible that there could be a decrease in the bits shipped per unit. > - MU has a "must-buy" contractual arrangement with the TXN plants. This is a continuing disaster, given the well-behind-the-current technology employed in the TXN plants. This engenders an extremely ugly choice,...spend all the remaining dough to upgrade the plants so that even more product can be dumped into an already saturated market, or keep the cash and watch the huge losses-per- shipped-chip grow even larger. < I am fairly sure that I remember seeing statements to the effect that the fab partners are solely responsible for financing at least some of the TI plants. The key question here is "are the partners able and motivated to make the investments?" Can Micron coerce them? How are the prices set? It is possible that the partners are making money while Micron eats the difference? Maybe everyone is making money on these plants if they are making the 16 Mbit parts which are now in somewhat short supply. > -Too much debt. Check out the interest bill that must be paid. The company won't be able to so do from cash flow unless dram prices rise a great deal. < Do you know the current status of the $500M convertable, deferable, bond issue of a year or so ago? Have they been using the defer option and if so, how long can they continue? Are the bonds getting close to conversion parity (I know we all laughed at that at the time but who would have thought MU would be where it is now.) and can MU force conversion? I think Intel is between a rock and a hard place when it comes to RDRAM. The only reason to buy an Intel processor is to get the very highest performance without regard to cost. Intel has committed to RDRAM for their high end processors. If there is no RDRAM, then the high end processors won't be able to achieve their full performance and Intel won't sell any. If there is a RDRAM shortage that boosts RDRAM prices, the price premium will come straight out of Intel's margins. Ed