Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Jackson who wrote (37129)	4/23/2001 10:57:13 PM
From: Rob S.	Read Replies (2) \| Respond to of 275872

I would not count on that. Even if there is some rebound in business the picture does not look good for maintaining the high margins the semi industry has grown to expect over the past few years of rapid growth. I sold semis in the past and went through a couple industry downturns: What happens when OEM sales plummet is that customers change their objectives from playing nice with and paying up to suppliers so that they can get scarce parts to beating them up to get every last cent out of the products they build. I remember a period in the 80's when a buyer I did a lot of business with actually cried over a few beers because he was having to kiss off all his vendor buddies and screw them every way he could find. This appears to be a market in which buyers who are bad asses get raises and buyers who are nice guys get booted out the door. The point is that the climate has changed to being extremely cost conscious so you can count on prices for semis coming down. I expect semi companies to report narrower margins, higher quantity shipments but lower dollar sales, and a dismal outlook for at least two more quarters and probably four. The demand cycle may be 3 months to the bottom but the demand/price cycle is not even close.