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 : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (11659)	10/8/2004 3:32:40 PM
From: etchmeister	Read Replies (1) \| Respond to of 25522

Inventory corrections that result from "just in time inventories (getting juster in time) is a much better correction than a fall off in end user demand. Hi Bob good point "juster" in time should also result in smoothing out the peak and valley It seems that smart box builder have deferred a channel build until the absolute last moment. Digitimes reported that some Taiwan DRM makers are short of test capacity; I believe Micron as well as Samsung have their own test & packaging operations To the degree that we get a good Christmas selling season,we could well build up inventories going strong into 2005. I think "Chinese New Year" is becoming an equally important driver; if I remember correctly they shut down for almost a week and it's a big family event From Taiwanresearch.comTaiwan: IC Foundry September sales results offer no surprises; we project 4Q04 sales off 2-7% QoQ The "finacial commuity" is questioning AMD's forecast. My only response is to read Digitimes and form your own independent opinion yahoo.reuters.com BTW Does anybody know if there is such thing as volume for oil contracts; my question is whether oil price are moving (up or down) on small or large volume

To: robert b furman who wrote (11659)	10/8/2004 3:51:14 PM
From: Kirk ©	Read Replies (4) \| Respond to of 25522

OK, I did my part for AMAT and the economy. I just replaced a 17" monitor in my home office with a 17" LCD. This goes along with the Laptop I bought last Dec to replace a PC in a tower. So now I have 15.4" and a 17" LCD monitors in my home office (I run dual monitors with a 128Meg video chip in my laptop.) I sure like the small footprints, lower power (should save on energy bills) and quality of the displays. What really amazes me is the price we get for a given quality level... Somebody besides me is sure buying this sort of stuff too as Fry’s parking lot was packed. I think home imaging has probably hit the magic $400 mark... Last week I got my girlfriend an HP all in one printer/fax/scanner/copier (with wireless no less) and an HP camera all for under $400! It amazes me how easy it is to plug in the camera (or just the memory card) into the printer where you don't even need to connect to your PC! You make proof sheets from the memory card you plug into slots then fill in bubbles in the proof sheet that the scanner scans to determine what pictures you want printed on the more expensive paper! Simply amazing how easy it is for non techie types to use. You can take pictures in max resolution and not have to mess with fancy software to scale the pictures which is what I have to do with my old technology.... The smaller footprint almost makes it worth chucking my perfectly functional HP all-in-one for one of the new models, especially with the wireless and networking functions which would get rid of one more wire on my desk. So.. I still don't own a cell phone but I'm buying new technology as needed and I sure like the value I a seeing. It is hard for me to see how people can remain such pessimists. I’ve always like your posts as you remain such an optimist! Kirk

To: robert b furman who wrote (11659)	10/8/2004 4:54:01 PM
From: Alastair McIntosh	Read Replies (4) \| Respond to of 25522

Here is another view on inventory (thanks to les horowitz) Message 20618669 Intel's recent mid-quarter update on Sept. 2 was interesting from the perspective of inventory levels. Intel has an inventory problem (although management is trying to take our eyes off that), and I think the situation can get worse. The Sept. 3 column examined Intel's the mid-quarter update in detail. Meanwhile, the inventory build is something that most don't want to acknowledge, and which can have a significant ripple effect: For Intel it's bad, because to drive revenue growth it will have to forgo margins -- unless demand picks up substantially. Intel may need to move out parts and become less dogmatic about what they're "worth." This could prop up sales at the expense of margins, or we could see write-downs at Intel. For competitor AMD, my sense is the inventory issue isn't as bad. AMD has built some inventories but not to the extent Intel has. For OEMs, it's fairly positive because they'll keep part of the price reduction and pass on the rest to the customer. When suppliers publicly admit they have inventory it's always a bonanza for those who buy and use chips. Pricing becomes negotiable versus the previous year or so that parts have been on "allocation." Compounding the risk to the sector is buyers now have an incentive to wait, since prices seem likely to fall even further. For consumers it's good, because OEMs will slash pricing, and in theory the average Joe could see lower PC prices. For IT distributors (such as Ingram Micro, Tech Data, etc.) the impact is tougher to determine and possibly too new to rate. It's a difficult area to get insight via broadline distribution, because it's not a main item, although chips of some type are in virtually every product sold. There are a lot of cross currents in PC-land: a fall off in demand could well be offset by a price war among Hewlett-Packard, IBM, Dell, Toshiba, Sony, and others that could keep unit sales moving. Pricing and margins then become issues, but with the various crosscurrents, the impact on distributors is too tough to call right now. I think inventory will continue to be a problem for Intel. The company's production efficiencies are causing output to grow faster than demand. Unless demand growth picks up significantly and stays up, Intel could continue to be trapped. AMD will be squeezed, but not as badly. Inventory is the elephant in the room nobody wants to see. For those who buy and use chips in their products, suppliers publicly admitting they have inventory is always a bonanza. Pricing becomes negotiable versus the last year or so that parts have been on "allocation." Compounding the risk to the sector is buyers now have a direct incentive to wait, since prices seem likely to come down further. In terms of absolute levels, I believe Intel's $3.2 billion is higher than after the last peak. Clearly there are excess PCs and components in the channel. Cisco admitted extra inventory as far back as May, so networking seems to also have excess. Rumors abound of excess inventory in many of the cell phone channels -- although end demand has been a lot stronger for handsets than it has for PCs, so I'm inclined to think the inventory problem wouldn't be as great as it is with CPUs. So far, the CNBC hype cycle has succeeded in pushing the clearly false claim that excess inventory is "needed" to support growth. If this was true then why has the last decade been spent buying IT gear, which was supposed to eliminate excess inventory in the supply chain? What happened to Just in Time (JIT) inventory management? The CNBC argument is so totally wrong that people think they must be missing something. If they believe the "spin" they are missing something. The next "spin" will be that sales are up, which supposedly excuses margin declines. This assumes suppliers choose to move inventory at a discount rather than write it off completely and hope to use it as "free money" in future quarters. (I've spoken with one sales manager at a publicly held firm tell me this was the firm's explicit strategy in 2001 when the business last turned down.) If Intel had set the bar lower, it would have to admit there was no way in hell it could get rid of the inventory it has. By setting it in the $9 billion range, it can continue claiming it has a plan to start working off inventory. (Although I think they'd need to have an $11 billion to $12 billion quarter in order to completely get through the excess inventory without major production cuts.) To some degree, Intel is trapped: set the bar lower and the question becomes "How in the world will you get rid of that inventory without substantial price cuts?" Set it high, and the judgment day is somewhat put off. Which means that the numbers Intel's management has been touting don't add up at all.