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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Logain Ablar who wrote (744)	10/18/2001 11:50:16 AM
From: Sam	Respond to of 99280

Tim, AMD and SST aren't really comparable, despite both being embedded flash vendors. AMD is all higher density, mostly 16, 32 and above mbit. 95% of SST's sales last quarter were 4mb and below. They have their niche, though they said yesterday that they will be moving into the 16 and 32mb market next year, beginning in Q1. They repeated once again--apparently pure flash makers have to repeat this every Q--that the flash market is highly fragmented and segmented, unlike other chip markets. Specs for their code flash chips are individualized not interchangeable, hence it is unlike other pure commodities like, e.g., DRAM or hard drives or even the flash cards that Sandisk, Samsung, Toshiba make for data storage. While the $136m inventory wasn't good, it isn't clear that it is terrible either. It is down from $179m last Q, the writeoff was only partly responsible for the reduction, they claimed that channel inventory levels are down now. They also said that while they wrote off the value of some inventory to 0, it is still saleable. So I guess that they are ready for a dumping party, should one be necessary. They also said they have renegotiated their foundry contracts, got better prices and will use less capacity, working down their inventory. Another writeoff is possible, but they don't believe that, even if there is one, it will be as large as this quarter. They seemed fairly confident that the bottom is in, but, as many others have said, the pace of recovery will be gradual rather than a V. All in all, seemed like a trading range kind of CC. I doubt it will go back to previous lows, but it will probably trade in a range of 6.5-7 or so to 9.5 till more info comes in. All IMHO, of course. Sam