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To: Todd D. Wiener who wrote (736)	1/28/1998 1:52:00 AM
From: Jeff Bond	Respond to of 886

There is one good time for an excessively high inventory, when there is a real shortage of raw material supplies. I read that the article expects a shortage of raw material in mid 1998 within the industry. It noted that competetive position could be determined by how well a company managed and controlled the effects of a shortage. I think SMTC may have gained good market share the past poor business cycle using this to their advantage. They seemed to have been able to manage inventory levels well during this period. With manaagement tuned to this issue, and plenty of cash to work with, there might be some positioning if there is a shortage of materials. Cash is king too ...along with the engineers to improve the yields, processes, and designs. I agree with you Leeza, that CPQ and INTC would be logical customers for SMTC in the xDSL business. I am looking at the specifications to see what products might be used. My first impression is the Railclamp line, but this is only a guess for the moment. CPQ really doesn't care how INTC feels (they have in the past, and they are currrently using AMD CPU's inside their low-priced models). This is good news, because it make SMTC components compatible and used by major companies in all markets including Pentium market (via INTC), Klamath market (via INTC, and possibly extended to HWP), Alpha (via DEC/CPQ or INTC, whoever uses the technology), AMD market (via CPQ), and others (we know that IBM relabels SMTC componets with their own name after marking them up 100%). There, is SMTC wherever you look in the computer industry; the CPQ/DEC deal brought SMTC to DEC, and this acquisition should force INTC and HWP to become closer buddies as they circle the wagons around Pentium2 and Klamath, in protection of alternatives from AMD, Alpha, Cyrix, or others. SMTC appears to win in all cases, hypothetically speaking :o) Go SMTC, go lower and I might be able to get some more too! Regards, JB