On Mon, 23 Mar 1998 Jeff Fabijanic <jeff@primordialsoft.com> Wrote:
>If you and Mr.Money-bags have similar factories, and they each cost
>$1M a month to run, and you have $6M reserves, and he has $60M, and
>he dumps his widgets on the market at a loss price that no short-term
>increase in productivity can match - you will run out of money
>quickly. He can sacrifice $10M so that you go out of business, and he
>now has the total market and makes up his losses in a year or two.
Now that Mr. Bags has dumped widgets on the market they're dirt cheap and
that means demand for them is huge. If the price is to remain cheap Mr. Bags
must build more factories and increase production, now he's loosing money at
an accelerating rate. Mr. Bags has more money than I do but he looses money
on every widget sold and right now he's selling a lot more widgets than I am.
I temporally stop production and wait for Mr. Bags to file for Chapter 11
bankruptcy. I won't have long to wait.
>a big reason that the Japanese companies eventually backed off their
>[RAM] dumping strategies was because of the trade sanctions
>threatened/carried out by the US gvt. in retaliation.
The US government sanctions hurt US companies more than the Japanese, that's
why they stopped them. The Japanese built fewer RAM factories which mente
fewer sales by the largest semiconductor manufacturing equipment company in
the world, the American company Applied Materials. Higher RAM prices mente
more expensive computers which mente fewer were sold which mente fewer
microprocessors were needed which hurt the largest semiconductor company in
the world, the American company INTEL. Fewer computers need less software and
that hurt the largest software company in the world the American company
Microsoft.
>I'd rather have rules of engagement that stopped the economic
>warfare from escalating in this manner.
Not me! In the entire history of human beings on planet Earth the price of
nothing, absolutely nothing, has dropped further or faster than the price of
RAM in the last 20 years, and in spite of this, or rather because of it, the
people who sell it have gotten immensely rich. The government tells me they
will be happy to fix this horrible problem, no thank you.
>I am aware of several major RAM production facilities in TX that
>were shutdown,
Nothing unusual or sinister in that, we're not talking about a steel mill
here. You build a 2 billion dollar state of the art semiconductor fabrication
plant and it's the wonder of the world for about 2 years, for another 2 years
it can make less demanding second line chips, then the obsolete fab is ready
to be torn down to make room for a new plant with improved technology.
>then sold and reconfigured to other industrial purposes altogether.
So what? The RAM business is profitable, the microprocessor and signal
processing business is even more profitable.
>there's far fewer small players in this mkt now not because of high
>production costs
Nonsense. A next generation semiconductor fabrication plant will cost
5 billion dollars, that's for one plant. How many players can afford that?
>but because it's generally accepted that
Generally accepted by who?
>you need deep pockets/govt help to survive in this industry of dirty
>tricks.
And you think government will protect the weak from these dirty tricks?
Ridiculous. Making friends with the weak and enemies of the powerful is no
way for a politician to stay in power.
John K Clark johnkc@well.com
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