To: Perry P. who wrote (310 ) 7/19/2000 1:15:08 PM From: Perry P. Respond to More good info on DSL chip sales from DSL Prime:Someday our chips will comeBut today, DSL chip makers are essentially sold out of current production, so the excellent results they are reporting should be no surprise - although they are lifting the stock prices. Five conversations with chipmakers this week, including two of the largest, confirm the situation does not look to change soon. None is ready to take large new orders for nearterm delivery, or to over-fulfill to current customers, although all are satisfying the commitments they have made. (Nancy Fares of TI, we previously reported, may be able to do better, with priority at TI's own fabs.) The vast majority of analysts expect chip supplies to remain tight, as wireless telephony gobbles a quarter of worldwide capacity, and few plants are coming on line this year. One chipmaker is looking to deliver 15-20 million DSL chipsets this year, while another has potential orders for 15M and hopes to be able to produce 12 million of those. The chip orders implied are higher than any estimate of actual subscribers, one reason the capacity is not in place. In times of scarcity, manufacturers build inventory and double order; when things catch up, the chip markets have been known to crash. Currently, DSL chip prices are significantly above last years' predictions, as a price war loomed last summer. We see no evidence supply will get better and prices fall. But at some point, DSL chips will resume their plunge towards the $10-15 price point that will make them standard in systems.electronicnews.com
