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 : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Serge Collins who wrote (9842)	2/25/1999 9:56:00 AM
From: Ian@SI	Respond to of 18016

SC, Traditionally, prices on chips have declined by 30% annually. Recently, prices have declined by a much more rapid rate, in the case of DRAM by as much as 90% during the past couple years. NN's input costs for chips is declining. Prices may also decline without impacting margins. More likely to impact margin is the quality of the competitor's products. If a competitor can produce unlimited quantities of a superiour product, then NN becomes a disastrous investment. So far, it appears that NN has, and will maintain a competitive advantage. And, IMO, is likely to maintain gross margins well above 50% even as selling prices fall. This is not unusual in this industry. Ian.