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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: w0z who wrote (9685)	4/12/2001 10:30:28 PM
From: Jacob Snyder	Read Replies (3) \| Respond to of 10921

OK, then how do you explain Intel's actions? Intel knows, in near real-time, what end-demand for their products is. Does that make their decision-making quicker or better? Not really. Even with that knowledge, they still have to guess and gamble about demand 18-24 months out. And then they base their capex spending on those guesses and gambles. At the moment, they are gambling that demand will turn up strongly, by the time the 7.5B they spend in capex in 2001 is producing chips. Other semis are gambling the other way. And lots of semis have no choice, they have to cut capex because they don't have Intel's pile of cash. In industries that are not so capital-intensive, or where the lag time between investments and production is not so long, I think you're right: more real-time data can lead to faster (and more accurate) responses to changes in end-demand. But not in the semi industry, IMO.

To: w0z who wrote (9685)	4/13/2001 10:33:42 AM
From: Katherine Derbyshire	Read Replies (1) \| Respond to of 10921

>>Human decision makers aren't involved anymore...MRP systems are linked directly to customers' order books and when orders fall...the supplier's planning systems instantly curtail the build plan. << Up to a point... to the best of my knowledge, the computers aren't writing billion dollar checks for new fabs yet. Also, while the degree of integration you're describing is a goal for many companies, very few of them have actually achieved it, and even then only for the largest customers and the largest suppliers. There are still plenty of supply chain inefficiencies out there. Katherine