Hi MB,
It all comes down to fear and greed and I seem to be endowed with too much of the latter, not enough of the former (except when it's too late). My mother always said I was a fatuous optimist ... but then she's Scottish!!
Am I missing something on the MU inventory numbers? ... management is apparently saying they have about 3 weeks' production on hand. To me it looks like almost 5 months. Here's my reasoning which I welcome anyone to blow holes in if they can ... MU's chip inventory is the MU balance sheet number minus the MUEI inventory number. Since the latter wrote their PC parts down to almost zero (yes, we will show a profit next quarter folks ... great turnaround by the new Pres.), it looks like the semi business had $393 million of inventory at the end of Feb., up $42 million in the quarter. Semi sales were $283 million. BTW, if you go back say to Q3 of last year when semi sales were $511 million, inventories were $100 million less than they are now. Guess they didn't have 'test problems' then. Anyway, $393 million of inventory is about 143 million parts @ $2.75 each. MU's shipments last quarter were roughly 86 million parts (assuming everything was 16 Mbit for simplicity's sake). So you get about 5 months of inventory at recent ship rates. These guys were betting that prices would recover ... in fact they've gone back down after the Jan. bounce. Now maybe 5 months is wrong, maybe it's 4 months. But how do you get 3 weeks?? That's the number that Gumport at Lehman is using and he's the only 'analyst' I've seen so far that even mentions inventory. Don't get the much-maligned Kurlak's stuff but would imagine he's noticed this fast-growing weed.
BTW, with both inventories and receivables up at MU Semi last quarter cash (net of debt) dropped a whopping $182 million and now stands at a negative $223 million (no Steve, you can't use that pile of dough at MUEI).
Skeeter or anyone ... my url for Achilles isn't working anymore. Have they closed up or does someone have a new url?
regards, Mike |
