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

To: Alastair McIntosh who wrote (11668)	10/8/2004 4:56:42 PM
From: willcousa	Respond to of 25522

It seems Les is ignoring the impact on margins which could make a difference IMHO. Will

To: Alastair McIntosh who wrote (11668)	10/8/2004 5:29:13 PM
From: robert b furman	Read Replies (1) \| Respond to of 25522

Hi Al, If the inventory is a result of high yield - then they just have to start fewer wafers and enjoy the yield efficiencies - after the excess is clear. On the bright side Christmas is near and this quarter is when the ramp up for production should be ongoing now. The asian assembler going 24/7 makes this possibilty look good. No doubt when there is excess inventory - margins go to pot. Believe me as a car dealer I'm totally aware that 1 too many makes margins slip. I believe that is the reason Intel dropped their margins guidance to 58 - 60 vs 60 +or- 2 points. If they want to blow out the inventory ,then calling the asian black box makers and offering a discount is a good way to do it. Intel has done this and left HP with a stuffed channel of overpriced boxes before. My bet is we'll see the retailers handing out cheap laptops at almost unbelievable prices - compared to what we're used to. Remember 2000 when everyone said you can't make money selling computer below 1000.It will be a commodity. Well laptops are going there also. Heck Dell sells towers for 499 and they'r P4 nice stuff. This Christmas, cars ,electronics,TVs,PC's are all going to battle for the consumer's money.It will be a great buying Christmas as the deals will be more attractive than ever. I think the deals will be so good - we're gonna just not be able to restrain ourselves. It will be a Merry Christmas - especially if we get this election behind us with a Christmas Rally and Osama in jail along with Saddam. Sounds good huh? Good to hear from you again. Bob

To: Alastair McIntosh who wrote (11668)	10/8/2004 7:12:00 PM
From: etchmeister	Respond to of 25522

What happened to Just in Time (JIT) inventory management? There are a lot of fabless IC makers in the US that depend on foundry service; when u-rates exceed 100% for months causing leadtimes to stretch out JIT does not work the way it's supposed to; you either "pad" the forecast or you don't. Contract pricing for DRAM is up (was reported couple days ago by DRAM exchange; if I recall correctly last year high pricing for flat panel forced boxmakers to cut memory; this year is different as low panel pricing provides additional room for box makers); back to flash: considering how many players (including Samsung and Micron) jump into flash it's really amazing that pricing for flash is recovering. While flash is a "commodity" with relatively short lead time relative to other IC's that go into products (right next to flash) these IC's might have longer leadtimes and consequently one could expect higher inventories for those IC's. The JIT probably works fairly good for commodities but if you have a fabless supplier you have to include the situation at foundry level as well and as we know in the past foundries enjoyed very good business. So I would expect that IC's should respond differently to inventory pending on the leadtime and that's what I recall one pundit saying :"it's a mixed bag" and to me that makes sense. I consider flash as bellweather IC because it is widely used within a very broad range of applications and end products (see the AMD article on flash); so if the pricing for flash recovers than the components that use flash should be recovering as well. A completely different "wildcard" is that NAND flash is making serious inroads into NOR (AMD & Intel) territory (handsets). About a year ago Samsung made a very strategic move in deciding that NAND would be THE technology driver #1 and DRAM would be second and Samsung clearly kicked Intel's ass in 2004 and the guy at Intel who was heading up the communication group got "axed". next week SNDK will report Item High Low High Change Low Change History DDR 512Mb 64Mx8 11.63 10.75 Stable ( 0.00%) Stable ( 0.00%) DDR 256Mb 400MHz 4.75 4.50 Up ( 1.32%) Up ( 2.86%) DDR 256Mb 333 / 266 MHz 4.75 4.50 Up ( 1.32%) Up ( 2.86%) Worldwide DRAM output slows, DDR2 sees a slow ramp Printer friendly Related stories Comments Email to a friend Latest news Hans Wu, Jack Lu; Jack Lu, DigiTimes.com [Friday 8 October 2004] Worldwide DRAM output for September increased 3.8% from August to 406.6 million 256Mbit-equivalent units, though DDR2 output remained flat, according to DRAMeXchange. Output of DDR2 accounted for only 4.6% of total DRAM output in September, compared to 4.4% in August, according to DRAMeXchange. DDR2 only accounted for 9.3% of the total DRAM output of Samsung Electronics, 5.4% of Micron Technologies, 10.5% of Elpida Memory and less than 1% of Nanya Technology. Market observers note that if the slow DDR2 ramp continues, chipmakers may not reach their targeted output level as reported on July 26. DRAMeXchange: Worldwide DRAM output (millions of 256Mbit-equivalent units) Sep M/M Aug M/M South Korea 172.6 3.0% 167.6 1.6% Europe 80.3 8.1% 74.3 6.3% Taiwan 72.6 2.5% 70.8 8.8% US 52.9 1.6% 52.05 4.4% Japan 28.5 4.8% 27.2 0.8% Source: DRAMeXchange, compiled by DigiTimes, October 2004.

To: Alastair McIntosh who wrote (11668)	10/9/2004 3:36:20 AM
From: Cary Salsberg	Respond to of 25522

RE: "The company's production efficiencies are causing output to grow faster than demand." It seems to me that lower wafer starts with higher "production efficiencies" will bring inventories back in line without seriously increasing COGS. RE: "...the clearly false claim that excess inventory is "needed" to support growth." This is an example of why I can't take the guy seriously. Obviously, "excess" in NOT "needed". If it were, it would not be "excess". Obviously, higher sales require higher inventories to support it and growth needs higher inventories. The question is when does higher inventories become excessive? No discussion of this point.