From Albert: Albert is no longer able to post here. SI is not fair, if they ban Albert, the Elmer guy should be banned
as well.
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07:11am EDT 27-Jun-00 Chase H&Q (Sudeep Balain) ATML CSCO INTC MOT NT NOK ERICY
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* There were comments made yesterday by one of our competitors that flash spot
prices have cooled off and that
spot availability in general has also loosened up. The obvious implication is
that more supply is coming on line
and that the current dislocation in the marketplace in terms of demand vs supply
is headed towards equilibrium.
This is certainly not the case as far as what we see in the marketplace. First,
unlike DRAMs, we believe monitoring
flash spot prices does not give one a true gauge of the demand vs supply
dynamics in the marketplace. Secondly,
the major flash manufacturers like Advanced Micro Devices (AMD, $87, Strong
Buy), Atmel (ATML, $40, Strong Buy),
Intel (INTC, $134, Buy), and STMicroelectronics (STM, $67, Buy) work with long
term contracts (6 months to 3 years)
that they sign with their major customers in the cell phone, set top box,
networking, digital consumer, and automotive
end markets (currently comprising of flash tier I, II, and III customers
worldwide consuming >90% of all NOR flash sold).
Our recent checks at such end customers indicate to us that prices are being
maintained per these contracts by the likes
of Nokia, Ericsson, Motorola, Sony, Cisco, Alcatel, Nortel Networks, etc. There
would be a cause for concern in our opinion,
if this were not the case. Again, flash spot market prices and its availability
(to mostly tier IV customers) is not an effective
tool in our opinion, to gauge true supply and demand dynamics in the total NOR
flash marketplace.
* We continue to believe that current supply vs demand dislocation in the flash
marketplace will continue at least through
mid of next year. As we have highlighted before, our best names to play the
current flash upcycle continue
to be ATML and AMD. |
