regarding overall PC inventory glut.
xmas 1995 PC sales was not as robust as anticipated. this caused several PC OEMs to get caught with chip oversupply. companies like oakt, hutchinson tech, crus, etc all reported disappointment earnings due to customer inventory correction problem. in the telecomm area, lattice and altera both reported similar problems in low density PLDs. these products have been in mass production for a while and, hence, OEM inventory build-up is inevitable. these inventory problems may take some time to heal before sales pick up dramatically.
for 1996-7, i suggest invest in chip suppliers of the digital video market. digital video is on the verge of taking off. this is the beginning of the cycle. chip demand exceeds supply by a wide margin. buy into companies like c-cube microsystem who has the core leadership advantage in MPEG digital video compression. MPEG is a standard for digital video transmission, applications include: DIRECTV, EchoStar, PrimeStar, Satellite-tv, digital cable set-top, LMDS, MMDS, tele-tv, karaoke LP, video CD (2.0 version), DVD, PC MPEG-board, Tv Ad insertion etc. (less than 10% of revenue is from PC related sales). cube/divicom is an absolute *STEAL* at 33/share. it will benefit from the exploding digital video conversion and interactive-TV.
on top of intel, buy into semiconductor companies like c-cube microsystem who has wide product-diversification and participation in a high growth market (digital video) where exposure to inventory glut is minimal. |
