McMannis - From NSM's 10Q filing - Doesn't look pretty -
"Wafer fabrication capacity utilization for fiscal 1998 was 76 percent compared to 73 percent in fiscal 1997; however, wafer fabrication capacity utilization declined to 51 percent in the last month of fiscal 1998. "
I don't recall Halla mentioning this little fact in the conference call - do you?
That new fab - running at half speed ! Such a waste !
Deeply buried in this report we find :
"The Company also believes the direction in the personal
computer industry to accelerate product migration toward sub $1,000
personal computers may, in the short run, unfavorably impact revenues
for the Company's other products in the area of chipsets, Super I/O
products and temperature sensors. The Company remains very cautious
about its future outlook, particularly with respect to the personal
computer business. As a result, the Company expects overall revenues, particularly for the first half of fiscal 1999, to be down from the level of revenues recorded in the second half of fiscal 1998, resulting in a significant net loss for the first half of fiscal 1999. "
I thought Halla loved the sub $1000 PC market !
It seems he can't sell the Cyrix chips into this market and the bread and butter NSM chips aren't being used either !
I'll bet Intel found another source for Super I/O chips as soon as NSM bought Cyrix ! In fact, that may be Standard Micro Systems !
We Also find :
"While management expects to more fully utilize wafer capacity, unless new orders improve significantly, the Company will continue to run its
manufacturing facilities at reduced capacity utilization rates in order to manage inventories and reduce cost. There is no certainty that the level of demand will be sufficient to fully utilize the additional new capacity. Failure to improve manufacturing capacity utilization will lead to decreased gross margin for fiscal 1999. "?
This is pretty bad news, Jim.
Didn't your TA charts tell you all this ?
Paul
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