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Technology Stocks : Texas Instruments - Good buy now or should we wait? -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (2071)	11/16/1997 10:08:00 AM
From: Thomas G. Busillo	Respond to of 6180

Skeeter, understand your point. But there's defintely a move towards more application-specific DSP's which makes the buy decision for an OEM less like the buy decision for a commodity product like a DRAM. I'm always interested in the "inside baseball" angle, so the following probably won't have much meaning for TI for a while, but... If for the sake of argument you assume that technology and cost advantages will lessen to some degree, one of the sources of competitive advantage over time for TI (or any DSP player) will be their ability to keep responding to the issues over and aboven technology and cost: The end products have short life-cycles. Design-to-market cycles are shortening. Demand is volatile. No one wants to hold any more inventory than they need. So in choosing a supplier, you're looking for someone who can work with you in the design phase, be flexible when demand kicks up, alleviate your inventory holding costs while at the same time not giving you headaches on delivery-time reliability. Over time, I think TI's investment in their BTO initiative will go a long way towards maintaining their market leadership position. It addresses exactly some of the key issues that purchasers will be considering when considering vendors who are all close on techology and cost. And granted, ADI, MOT have begun similar initiatives, but TI is much further along. Does this mean anything for next week? Absolutely not. I totally missed the 11/11 Kurlaking on the chip sector, so that goes a long way in explaining mid-week weakness in TI. Good trading, Tom

To: Skeeter Bug who wrote (2071)	11/16/1997 11:04:00 AM
From: Nhiem Nguyen	Read Replies (2) \| Respond to of 6180

< if ti can do it then anybody can do it. if that is the only chip sector with earnings growth then EVERYONE AND THEIR MOTHER will start making them or competing products...> skeet, The definition of a commodity is low price and low margin with high volume. Is EVERYONE & THEIR MOTHER stupid enough to jump into a market that has those characteristics????? Why mobilizing your work force to jump into a market that has low potential profit? And competing with TXN head-on? There is a thing called competitive advantage. TXN knows how to utilize economy of scale because they own and can controll high volume manufacturing (including FABs). That is NOT something that EVERYONE and THEIR MOTHER can do. May be a handful, but not EVERYONE. It's a huge expense to build those FABs and test facilities, for starters... By the way, how can a high growth market be of commodity nature. Commodity occurs only in markets that are MATUREd, and perhaps declining.