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To: Saturn V who wrote (95108)	1/6/2000 12:06:00 AM
From: Process Boy	Respond to of 186894

Saturn - <Hopefully Intel is not wafer fab capacity constrained, because it takes years to bring brand new wafer fabs on line.> Me to. I REALLY hope it really is GTW's problem, and not a severe x86 capacity issue. Capacity issues s*ck. PB

To: Saturn V who wrote (95108)	1/6/2000 12:16:00 AM
From: Tony Viola	Read Replies (1) \| Respond to of 186894

Saturn V, article below further emphasizes the very strong demand going on right now, and projecting forward, for semiconductors. Your idea that Gateway's problem appears to be a demand forecasting problem. is undoubtedly being exacerbated by the tight supply situation everywhere. The boxmakers had it made when they could sit back, let Intel, IBM, Seagate, Samsung, ASUS and the like do all the development, and then order the parts just in time, and stick them together. Not so easy now. "There is a shortage of capacity in virtually every product area," he explains. In fact, the outlook is so bright that some chip equipment managers are starting to worry that IC growth could be too strong in 2000. This, they say, would result in a return to product glut conditions within a couple of years. "We'd rather see a long growth period instead of one of these quick jumps or spikes," declares Werner Rust, director of marketing at San Jose-based Silicon Valley Group Inc. That's not the end of the good news. "We now expect three very fat years," declares analyst Risto Puhakka, vice president of operations at VLSI Research. Chip equipment sales in 2002 are expected to grow 30% to $60 billion, he predicts, before they flatten out in 2003. "Capacity is very, very tight, and it will only get tougher to keep up with semiconductor demand," Puhakka notes. "We're already seeing the new fab announcements starting to roll in, and we haven't found any nasty surprises to spoil the party." Message 12473263

To: Saturn V who wrote (95108)	1/6/2000 12:57:00 AM
From: kash johal	Read Replies (2) \| Respond to of 186894

Saturn, Re:"difficulties for BTO in supply constraint market" You make some excellent points here. In addition one can also reccomend a BTO supplier NOT sole source his CPU's to gain felxibility. And secondly AMD's management which was pilloried for investing in new fabs a year or so ago has brand spanking capacity for flash and a brand new MEGAFAB coming on-line in a few months at dresden. Timing is everything in this business and this should be good for AMD and Intel as folks like Cyrix,Rise, IDT have dropped by the wayside. regards, Kash

To: Saturn V who wrote (95108)	1/6/2000 3:16:00 AM
From: Amy J	Read Replies (2) \| Respond to of 186894

RE: "with the BTO(Build to Order) model, demand forecasting was an academic exercise. Gateway and Dell ordered chips as soon as the customer ordered the computer.So the risk of demand forecasting was passed on Intel. It takes two months or more from wafer start to finished product, and so Intel marketing made the best guess of customers needs." Hi Saturn V, I don't know how Intel does their ordering, but I would doubt this is how it happens. Here's why: remember article on Intel StrongARM which quotes an Intel PM who stated something like, "we [Intel] wouldn't have shortages if vendors gave better forecasts of their orders." This comment implies forecasts are (extracted or) submitted to Intel. Don't know about Intel, but I think forecast 'scheduling' in general is still done in advance, submitted to vendor, while the actual builds and delivery could be at the last minute, BTO. Maybe deltas are handled as a financial penalty, would be my guess. Regards, Amy J