What is CRUS doing about capacity and what effect might it have on margins for Q3.
Downdraft_00,
The short answer is ALL "high volume" semiconductor companies are short of capacity today; so is CRUS. CRUS is making some progress in increasing capacity, but will not ship all it could if it had more wafers. So, there are two effects of short capacity, 1 - less sales you can ship, 2 - higher margins. You might say less sales, OK that makes sense, BUT higher margins, WHAT! Yes, higher margins. When you have less wafers, you do two things, 1 - RAISE PRICES (and not just a little), 2 - give priority to higher gross margin products first. Also, think about what Dave has said recently - CRUS products were $1-3 bucks, now $5-8. This is the effect of CRUS's CMOS SOC Technology. No other semiconductor company does it as well! As shareholders, you will not even know that CRUS is short, revenue and gross margins will continue to grow quickly. Expect gross margins this quarter to be in the 46-48% range, trying get over that 50% mark in the next few quarters! Why the increase? Well, thank CRUS's 3CI product and Fujitsu! The guidance that Dave gave at last quarters CC has changed for the positive. Expect Dave to come out and PRE-ANNOUNCE better numbers BEFORE next quarter's numbers come out! Hope this helps. GO LONGS! |
