There are several things wrong with the SSB comments that it is too much to discuss here in entirety, but I will say some generalizations.
For one thing, there is a big difference in the semiconductor industry today from as recently as just five years ago. Back then, chips were mostly for PCs, but now there are many, many applications and more coming. None more evident than those for appliances and wireless devices that access large amounts of data form the internet. I do not need to list all these. Then there are those that run electronics systems like routers, fiberoptic devices, and digital equipment.
Next up is the outdated mode of upgrading and downgrading the ENTIRE sector with one sweeping statement. Again, there is a major division withing chip companies. Advanced Micro Devices and Intel may be in the same boat, but they are miles apart from a Vitesse Semi, Texas Instruments, or PMC-Sierra and way the hell away from a Broadcom and/or any of the flash memory companies. There are BIG differences between growth rates for these companies.
Another point has to deal with overproduction in flash memory. There is going to be tremendous demand for flash memory for the next decade or more. Why? Quite simply there is going to be incredible demand for wireless access to the internet in addition to digital equipment such as DVD players and MP3 players to name a few examples. PC demand may have been cyclical, but it will be years before demand for these devices become cyclical, if ever. I can recall when analysts were making sweeping statements about bandwidth saying that there would be a bandwidth glut. TheStreet.com put out info on that about a year ago, yet the bandwidth glut is NOWHERE in sight and companies providing fiber like Corning, JDSU, SDLI, and so on are doing just dandy. In fact, the future is as bright as ever. I suspect the same will occur here for flash memory.
Last, the idea that INTC and AMD may be getting into flash memory is not a negative. For one, it confirms the enormous need and market for flash memory. These huge companies wouldn't devote resources to small change operations. If they saw capacity leveling off, would they be devoting resources that way? And whose to say they won't license SSTI technology to produce the flash memory. All INTC and AMD have said is there is a large need for flash memory. It didn't say that they will develop their own flash memory. SSTI already licenses technology to many semis, including INTC, and will probably continue to license their patented technology.
I find it hard to believe one analyst, who has no support from his peers, has this much effect. I suggest we all remember this guy and discount all future calls. Credibility is all this guy has and if he is wrong, as most expect, then he should never be interviewed again and his calls should be ignored. Let us not forget the past. |
