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

To: Skeeter Bug who wrote (44652)	3/30/1999 9:57:00 PM
From: Carl R.	Read Replies (1) \| Respond to of 53903

You may laugh, but I'm serious. MU was clearly the low cost producer at 4MB in the end, and got that way by doing a shrink after everyone else has moved on to 16MB. If MU is still doing shrinks at 16MB, then they will no doubt be the low cost producer at 16MB and will be profitable on the 16MB chips that they sell. On leading edge parts both supply and demand are constantly increasing, but on trailing edge parts they are typically both shrinking. Typically prices don't fall as fast on trailing edge parts, and when a player ceases being profitable he discontinues production since there isn't much point trying to build market share in a declining market. Thus the low cost producer should be profitable so long as demand still exists. Note that I'm not saying that 16MB will be a big profit center, but hey, profit centers are better than loss centers. And if MU thinks they can make some profit out of 16MB production by doing additional shrinks, far be it for me to tell them not to. Carl