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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (36993)	8/25/2000 7:08:38 PM
From: FJB	Read Replies (1) \| Respond to of 70976

Story from earlier in the week. Apologize if it is a repeat, but I don't recall seeing it. Allocation anxiety -- Smaller OEMs especially hard hit by shortages Laurie Sullivan techweb.com Random excerpts: ... "We're not always able to get capacitors, d-sub connectors, DRAM, and most [other] memory through the usual distribution channels," Hedgepeph said. "We do material-resource planning for the distributors to let them know what's coming down the pike, and they still don't have the products we need. It may not be true, but it seems the manufacturers are selling to their top 10 customers and nobody else." Unable to find components through regular channels, Hedgepeph goes to brokers for the majority of the products Glenayre needs to keep its production lines up. Many OEMs have no choice but to source their parts through the aftermarket, eating into their profit margins by paying multiples of typical contract prices. Glenayre knows that better than most, Hedgepeph said, because the company absorbs the hit instead of passing its cost on to the customer. ... Living with the 'A' word Allocation has become a fact of life for OEMs. Take once-abundant DRAM, until recently the poster child for the semiconductor industry's capacity glut. Companies have done little to prepare for a DRAM shortage that is expected to worsen this quarter and linger to some degree through the second quarter of 2002, according to Dataquest Inc., San Jose. Indications of inventory stockpiling are beginning to surface, but it is unclear whether this involves buyers hedging against price increases or manufacturers reluctant to release product into the market when it could fetch a 50% premium in the next six months, Dataquest said. DRAM isn't the only part on allocation. In a conference call earlier this month, Steve Church, president of Avnet Inc.'s Electronic Marketing Division in the Americas, recited a laundry list of products that included SRAM, flash, SAW filters, and analog components (see table). Other parts, such as discrete logic, that used to take days to procure now require up to 36 weeks. ...