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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: A. Edwards who wrote (2953)	10/14/1999 12:05:00 AM
From: David Lawrence	Respond to of 4710

In re the channel inventory issue, Vitesse was capacity constrained prior the the CO fab coming on line. Anyone seen any numbers regarding recent capacity utilization at CO?

To: A. Edwards who wrote (2953)	10/14/1999 12:07:00 AM
From: SJS	Read Replies (2) \| Respond to of 4710

To me, it requires a very large leap of faith to make the probable connection between the two companies on the single problem. Let's look at the comments: We have lowered our rating on customer inventory concerns. While Hi/fn stated that end-market demand for Ascend was still growing, the customer had accumulated too much inventory of Hi/fn's devices and plans to deplete inventories in the December quarter. Right now, this is ONLY a HIFN issue. This is an issue for Vitesse since Lucent is Vitesse's largest customer (roughly 20% of sales). Huh? This is a HIFN issue, not a VTSS issue. Vitesse predominately supplies chips for optical networking, and is therefore not likely entangled in the MAX-TNT (an access switch with copper, not optical, interfaces) inventory problem. What is this guy drinking? First he says it's an issue, then say's it isn't Nevertheless, the problem for Hi/fn will likely raise questions about inventory management practices in general at Lucent. In fact, inventory turns at Lucent have deteriorated over the last several quarters, from 5.5x in September 1998 to 3.7x in June 1999. AH! Raising the question is a good idea, and I thank you for the prudence of bringing it to our attention, but it sounds before this comment, you've sorta yelled fire in a crowded theater...Does this merit lowering a rating on VTSS? Watch out for the lemmings on their way out....Geesh. Steve