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Politics : Formerly About Applied Materials

AMAT 304.08

+2.2%

Feb 5 3:59 PM EST

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To: Marc Trombella who wrote (17070)	3/5/1998 12:20:00 AM
From: BelowTheCrowd	Read Replies (1) of 70976

Marc, > Box makers are soaring right now. I believe Intel is the loser > now because of the product transition in place right now. It's not really a product transition as much as a PROCESS transition at the major boxmakers. Dell has really raised the bar on inventory costs by decreasing their on-hand inventories to 10 days of production or less. At HP we are trying to do the same thing, as is CPQ and (I imagine) everybody else in the industry, everyplace else in the world. When those kind of inventory reductions happen, it is felt as an immediate hit to revenues at the major suppliers. The long term trend is not necessarily disturbed, but in the short term they sell a little less as the box-makers soak up the inventory on hand. One of the reasons boxmakers (esp. DELL) are soaring is because of ever-increased efficiency, which unfortunately translates into some of the market variability getting transferred to suppliers. Expect similar in disk drives. mg

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