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To: Dave Gahm who wrote (42768)	2/5/1999 12:04:00 AM
From: Thomas G. Busillo	Respond to of 53903

Dave, I think one answer might be found in them failing to make the distinction between what MU's assets did on a sequential basis on their own and what the TI assets added. When he says bit production grew 10%, I think he's including the 2 months of TI assets. Sure, overall bit production grew 10%, but what happens when you focus solely on MU assets on a sequential basis? Take total megabits available for sale to be a like bathtub. During 4Q you only had one faucet filling the tub. This time for 2 months you have that extra faucet that's helping fill the tub despite the attenuated flow coming out of that one. I don't think they ever answered how much the flow of that first faucet was attenuated. If they're saying 35% sequential this Q - fine. Maybe they unblocked the bottleneck on schedule. Anything's possible, but I'd be shocked if they were playing games in the sense that production included stuff that didn't pass through the bottleneck. As much as I think a lot of what they did regarding the 12-23-98 disclosure (or lack thereof) flat-out stinks, I'd have to think that GAAP, their auditors, common sense, etc. - would prevent them from doing that. You just can't do that. Then again, I'm not that familiar with GAAP or inventory accounting practices in this industry. Maybe you can do that? Can anyone out there with industry expertise help clear this up? If last Q they were having those production constraints on the backend (test and assembly), would it be okay/normal for them to include whatever megabits hadn't made it past the bottleneck as "megabits produced"? Much like asking Bill Clinton about sex, any questioning of MU needs to begin with very precise definitions of the terms used Exactly! Good trading, Tom