Posted: March 7th, 2017

DRAM chips are an essential component of personal computers, telephones, and other electronic devices.

DRAM chips are an essential component of personal computers, telephones, and other electronic devices. Since the 1990 s DRAM evolved through several generations from 4 megabytes to the present 4 gigabyte chips. Until 1998 there were two major American manufacturers of DRAMS Texas instruments (TI) and Micron technology. Then TI sold their factories in Avezzano Italy, Richardson Texas, Singapore, and interests in Asian joint venues to Micron Technology . TI shut down the remainder of its DRAM production facilities including the one in Midland, Texas.

a) which probably had the higher average cost the Richardson or Midland Plant?

b) Compare the effects on the would wide long run DRAM supply of TI s sale of the Richardson plant with its closure of the Midland factory.

c) Explain Micron s descision to buy TI s plants in terms of differences between the two companies in their expectations of long run DRAM prices.