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To: Carl R. who wrote (45581)	5/4/1999 2:10:00 AM
From: Ed Beers	Respond to of 53903

Carl, One dynamic that I believe has changed is the obsolesence period of the basic building. The building used to have a short life because air filtering and particle control was done on the room. Each new generation required lower particle counts and this was accomplished by building a new and better fab. The old ones were scrapped because couldn't build state of the art devices. Now, mini environments are prevalent so you don't need a new building to go to a lower geometry. This allows for incremental upgrades and extends the life of a fab. Not good if you want extra capacity to vanish.

To: Carl R. who wrote (45581)	5/4/1999 9:09:00 AM
From: Fabeyes	Read Replies (1) \| Respond to of 53903

.... He presumably is taking the view that the DRAM producers will repeat 1997 and order another round of equipment (good for equipment, bad for DRAM). I lean towards that scenario myself. ... The old saying, well the saying anyway is: buy during the downturn so you will be in position for the upturn. I think that is what will happen.

To: Carl R. who wrote (45581)	5/4/1999 9:55:00 AM
From: Steve Robinett	Read Replies (2) \| Respond to of 53903

Carl, You comment that like the game "prisoner's dilemma", each DRAM producer optimizes their own profit by ordering equipment, while all are better off if none order equipment. In the absence of conspiratorial agreements they will each order equipment, even though they are all worse off as a result. Not quite. The problem is not that chip makers are maximizing their profit in a perpetual zero sum game but that declining prices for their goods are forcing them to reduce costs or die. If all the producers did enter your "conspiratorial agreement" and quite buying equipment to increase yield, the market would force all but the financially strongest out of business. The last fab standing would own the market. IOW, producers have to upgrade equipment or go out of business. Best, --Steve BTW, as of this morning, the lowest street price on 64megs of PC100 DRAM is $44 and falling about $2/day