Disk Drive Sector Discussion Forum Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Disk Drive Sector Discussion Forum

WDC 163.33

+3.5%

Nov 28 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Stitch who wrote (5980)	3/30/1999 11:08:00 AM
From: Robert Douglas	Read Replies (2) of 9256

I think the odds are growing that the decline we have experienced lately had its roots in what I call an “inventory echo”. As you all know, last year saw a very large inventory liquidation due to many factors which included recession in Asia, switch to BTO, channel stuffing and a drop in the growth rate of PC sales. While this inventory was being drawn down, production was below what was actually being sold at the end of the pipe. When the excess inventory was eliminated, the production had to jump to bring it back in line with ultimate demand. This produced a momentary surge in the growth rate and doubtless some ill-founded optimism among PC makers and parts suppliers. Now we have a smaller inventory drawdown underway. I don't think it will be nearly as severe as its predecessor and will likely be corrected rapidly. Isn't this precisely what we want to happen? - Inventory buildup resulting in production cutbacks before they get too large. The disk-drive industry of old would have gone right on producing at high levels until a glut killed everyone. -Robert

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next