Dan, I also post on a number of subjects on the "Ask Michael Burke" thread. And, I sometimes show up on the Micron Only thread when I have some spare time. More rarely on Waiting For the Big Kahuna.
I am not saying Atmel's strategy is wrong, just that they may not be able to execute it longer term against companies such as Intel and Hitachi who spend more on R&D than Atmel has in sales. As DRAM and SRAM and graphics chips continue to produce losses or very low profits, the major chip firms continue to raid Atmel's bailiwick.
The strategy is really the only one Atmel can follow. Trying to out-mfr, out market, or out-price the giants of the industry is a mug's game. The problem is, this strategy has worked great in tech bubbles, such as we've been in, when commodity chips are selling great. No large player pays much attention to Atmel's tiny niches. But once the bubble starts to deflate a bit, everyone looks for the few areas in the chip business that still have margins. And, since Atmel's customers are also its competitors, things can get rough for a tiny player in a niche segment.
Also, pushing them from the other side, their very success makes them vulnerable. They have to expand their niches to grow, and one or two hot new products are any longer enough tail to wag this much fatter dog.
My target for the stock over the next 2 years is still $10. They don't have to go broke to get there. All they have to do is get a market valuation based upon their sustainable earnings over a complete cycle, not one based just upon the cycle top, as we had when the stock was in the 30s. I have no idea what the multiple was based upon when the stock was in the high 40s. Pipe dreams, I suspect.
I have no expertise on lawsuits like this. They seem to be a coin flip and it is impossible for outsiders to judge the viability or the makeup of the court or jury.
MB |
