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To: Patrick Hennessey who wrote (45369)	4/24/1999 10:47:00 AM
From: Carl R.	Respond to of 53903

IBM is tough to figure, as well. They may well be one of the lowest cost producers as well. I don't think that they will give up DRAM. But there are some marginal producers out there. As Tad has pointed out, the Tiawanese are really foundries that can switch between DRAM and logic. I expect there will soon be plenty of wafer capacity available for logic. <G> I also expect the price to stabilize in the next 30 days in the $5.50 range, though it could dip a bit lower in the short run. Watch to see who cuts back production as the high cost producers identify themselves. Similarly watch to see who drops 64mb chip production completely and moves to 128mb or 256mb for the same reason. If enough people move to 128mb, expect to see the cost per bit drop quickly and approach the cost of the 64mb chips, and then those who switch won't have gained anything. Carl

To: Patrick Hennessey who wrote (45369)	4/24/1999 10:53:00 AM
From: Fabeyes	Respond to of 53903

The difference from 3-5 is slight. I think you are right though this might weed out SOME companies. An unknown source is the Taiwanese. Large and deep pockets with almost no labor costs. Even though most are foundries them at the same time can produce volumes of parts on their own. You should go visit one some day. Talk about living robots these workers have but one thing on their minds; world domination.

To: Patrick Hennessey who wrote (45369)	4/24/1999 1:30:00 PM
From: SeaViewer	Respond to of 53903

Patrick: From long-term point of view, the bloodbath may not bring any benefits to the low-cost producers. Check out disk-drive makers. The remaining manufactures don't have any gains as the DD price continues going down. Jeff

To: Patrick Hennessey who wrote (45369)	4/25/1999 9:21:00 AM
From: A. A. LaFountain III	Read Replies (3) \| Respond to of 53903

Re: "one more real good bloodbath in DRAM will be good for the industry" One of the more interesting aspects about the 1999 version of the weak DRAM market arises from Hyundai's press release in the fall of 1998 about the ramp this year of the Eugene fab. If you take the projected revenues and unit shipments from the press release, it's an exercise in arithmetic to derive the $6 64Mb ASP that they were using for their 1999 shipments. I bring this up because if this were an impediment to their profitability, I doubt that they would trumpet it to the world in a press release. Thus on to two questions: 1) If Hyundai can make money at $6, what does that imply for the rest of the industry? 2) If a major producer is making money @ $6, why should supply growth begin to decline as market ASPs drop from $10+ to their current levels (which are still above $6)? It could very well be that my first assumption (Hyundai making money at $6) is way wrong, which would obviate the need for the questions. But if it's right, then there's a major problem with the DRAM market for several more months. - Tad LaFountain