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To: Kathleen capps who wrote (23833)	11/11/1997 7:18:00 PM
From: Thomas G. Busillo	Read Replies (1) \| Respond to of 53903

Kathleen, thanks. Here's an article from yesterday's Techweb on how chip manufacturers are adapting to increased BTO mfg. by customers: techweb.com Highlights: The chip makers significantly lag the computer industry when it comes to the percentage of revenues that come from products built to order. But leading semiconductor vendors expect to reach parity with their customers within the next several years... ...The computer and electronics industries have been rapidly moving their production over to the build-to-order model. Some 61% of their revenues last year were based on the BTO approach, according to surveys made by consulting firm Pittiglio Rabin Todd and McGrath. This percentage is up from just 38% in 1991... ...The entire electronics and computer industry food chain is moving quickly to adopt the BTO model, usually by reworking existing systems and processes. Which chip companies are involved in migrating towards a BTO v. build-to-stock approach? According to the piece, Intel, Texas Instruments, Motorola, Analog Devices, LSI Logic and National Semiconductor. All obviously very minor, insiginificant players. Here's a quick take on TI's progress to date: One of the most ambitious programs is now getting installed at Texas Instruments Inc. The Dallas-based chip maker is spending more than $100 million to rebuild the information technology infrastructure of its semiconductor business. The four-year program to design, implement, and operate a raft of commercial software packages is aimed at giving TI the ability to build to order its entire line of digital signal processors and other chips. TI seems to be making real progress in switching to the new manufacturing software. More than 50% of its revenue this year will come from build-to-order sales, TI's Coup estimated, up from just 25% five years ago. And the Texas chip maker is even more ambitious about the future. "We want to get that number up to 75% over the next few years," Coup said. These individuals seem to be under the impression that BTO is happening and will continue to accelerate. Of course, it should be noted that their knowledge and expertise merely comes from their positions out on the front lines of the industry, which is a far cry from what really matters for semiconductor investors - an analyst with a "proprietary" "model" <g> Good trading, Tom