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To: SJS who wrote (1502)	4/25/2001 12:21:24 PM
From: Rob S.	Read Replies (1) \| Respond to of 1805

Good report of the situation. The bottom line for any chip sector is determined by the health and outlook of the end product markets. The telcos are hurting from a massive period of irrational exuberance in spending. The problem is that the debt structure and overbuilt situation has swung to such an extreme that even rational capital spending plans (those with good pay-back) are going to find it hard to get funding. We have seen a series of bankruptcies already; a barometer of how bad the situation is that companies are failing and nobody is scrambling to buy them out. There is no visibility at this point because there is still no big catalyst that will drive the industry forward. 3G has been delayed repeatedly and expectations for subscriber revenue reduced. Capacity is overbuilt except for local loop and last mile service connect. But even the areas that should get funding aren't. This situation will change eventually to become moderately better into next year but there is no indication of that yet. Some analysts think it will be 2-3 years before spending in the communications sectors returns to normal levels.