I am less bullish than you both short term and long term, but not bearish. On fnclwzd -- I am highly skeptical of any "factor" increase in sales in 2001 versus 2000. I am so sure Bruce did not say it that I am not even bothering to confirm it with him.
Remember that the excessive cost inventory will be with us per previous statements through the first half. Therefore, I look for some next CC statements about how inventory contains so and so much competitively priced Yamaha product, which will help future quarters. I am only expecting the loss to drop to the 15-17 cent range this quarter.
I understand Bruce's position precisely. However, I am furious that Klein is unwilling to spearhead (as the logical one to do so) retirement of the old Board members in general and some of the old mgmt still around. This company needs every penny, needs a sense of accountability and a sense of urgency, that keeping people around responsible for the problem (who collect salaries but don't buy stock) strongly inhibits.
That said, we are facing some very good things not too far ahead. You have noted some.
-External foundry capacity at much lower per wafer cost of Milpitas
-Several times as many die per wafer with C7 versus C5/C3
-Much better gross margins or sales driven by the above and the balance between the two desired
-Loss of depreciation charges when the fab gets written off
-External design help from Sanyo and ZMD
However, some major obstacles exist:
-Unimpressive design skills highlighted by expensive DSP failure in the past and op amp intro and withdrawal more recently. All the cheap fab capacity in the world won't help if you can't design products -- although I like idea of battery mgmt products.
-XBGA exclusive license goes away within a year I believe. That is a major percent of products. Who knows what happens when competitors get it. In the past Xicor gets left in the dust.
-Sales skills and alliances barely border on competent. DCP product with Vishay has delivered what? Same with Smart Cards and ATMI. This concerns me a lot as I have learned over the years that marketing is
VERY important to tech companies, especially ones run by engineers who seem to think that "if we build it, they will come".
I am not at all sure how these plusses and minuses will play out, and would appreciate your perspective. |
