Addi even though I agree with you in general about analysts and their ulterior motives and competing interests I think it is important to at least listen to what they say. The rest of the market does.
I disagree with Kurlak's time frame and I think the pricing pressure is nothing new. LSI's, VLSI's, ALTR's and others gross margins have not come down in the last few quarters. They've gone up. This suggests (currency issues notwithstanding) that Kurlak's 1994-present overbuilding idea leading to lower utilization and lower profits just does not cut it. I know VLSI has been at 90-95% utilization and ALTR's fabless partners are going full throttle. LSI's 70% utilization is typical of LSI - it rarely goes very very high (company specific therefore).
Kurlak's comments as applied to DRAM are fully true. Overbuilding => overcapacity => tight profit margins => trouble. But the same definitely does not apply to MPUs, linear/mixed-signal, and most of the logic segment (heck even special memory chips like flash have done well this year.) And if there was so much overcapacity how come the foundries are burning rubber operating at full capacity. Kurlak's bombed re: overcapacity in non-DRAM segments.
In end-user inventory issues I think he's right. I get a sense there is some inventory issues near term in certain segments. Communications chips definitely (but suspect this is SEA and definitely s/t - intermediate term to long term these chips will do extremely well), high end computing - yes - SUN, SGI yes. Not sure why for high end computing but maybe WINTEL NT Servers could explain it.
I also agree he will do a 180 turn. But I suspect it's going to come later than March '98. He never goes half-way that's for certain.
yahoo.com
In LSI Logic, most action was in the December 25 put, which traded about 2,165 contracts. The option, which rose 1-1/4 to
2-1/4, had open interest of 1,255 contracts.
-- ot --
Check out 3Com earnings warning - inventory problem. Looks like the X2 modems are being met with K56Flex power. ASND just announced a nice report today about K56Flex acceptance and implied that K56Flex has overtaken x2. Which is good for ASND. |
