Aki - set top boxes, mobile telephoney, and digital tv [are] in consumer areas that are very price sensitive.
As I have said before, it is true that the end manufacturers for many of the consumer products have very low margins, but the semiconductors that go into them are NOT low margin. The gross margins tend to be around 50%. VLSI, for instance, makes chips for STBs and mobile phones and has a gross margin of 45%. And just as an example of how high tech these devices are, CDMA mobile phones, MPEG boxes, ... were not technologically feasible 5 years ago. And if you think the growth of these products can't catch up with PC's, keep in mind that Ericsson grew handset sales at 80% last year. And most developing countries have many, many more TV's than phones, so the market for STB's is large.
Clark
PS As for Intel's margins being down causing Intel to force AMAT to lower its margins - Only if the rest of the market doesn't take up the slack, otherwise AMAT would just tell Intel to shine on. Intel is a big force, but nowhere near big enough to significantly affect supply and demand by itself. All JMO. |
