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Technology Stocks : Semiconductor Industry Sales Trends -- Ignore unavailable to you. Want to Upgrade?

To: stockaholic who wrote (25)	5/30/1998 7:11:00 PM
From: Michael Sphar	Respond to of 105

I think they lag. It seems to me the flow goes like this: The electronic equipment maker's design shop decides on a new version for production, and orders chips through their contact with semiconductor sales based on anticipated run rates. The chip sales guy's job is to move parts and is constantly forecasting back to corporate chip house what anticipated demand of manufacturing will be. Of course sales guys are usually wild-eyed optimists who are striving to meet (un)realistic sales goals to trigger the commission gimmees that thrills their hearts, so internal to the factory their forecast numbers are screened and adjusted by internal planners. As these planners try to figure out how to best load their factory. They forecast to manufacturing so many of this device or that device starting at a specific time-frame. This rolls up into capacity plans. The manufacturing side of the chip house looks at these trends and decides how to best stay in front of this demand. As they continue to see growth they'll buy more equipment. They are also influenced by the process technologists who try to move their tech forward as a means of increasing tactical advantage over their company's competition. So as the sales/planners forecasts continue to look rosy, the factory tuners and tweakers will force the factory to grow and buy more and newer equipment. Now semiconductors are cheap end-units when measured by manufacturing costs. But the specialized pieces of equipment which participate in the various steps to build these chips are either very expensive or extremely expensive as well as complex to build. So these boxes usually have long lead times at the equipment maker's factories. After a new box is delivered, it has to be tuned, tweaked, qualified and inserted into a running clean room. They also, in some cases have to learn how to run it. All this takes time. So the chippie's tend to order in advance of their needs but not to far so they don't get hung out if the biz cycles. Because of the steep costs of these units, the buyers try to have excape clauses in their ordering contracts so they can back out of the orders if necessary. Consequently when the biz turns downwards, the semi equip guys are the last to know. There are some threads on semi equip in the semiconductors section of SI where people more knowledgeable than myself can be found. Hope this helps. Keep up the good data info in this thread.

To: stockaholic who wrote (25)	6/3/1998 11:02:00 AM
From: Michael Sphar	Respond to of 105

<< Other market research companies also lowered their forecasts citing price erosion, a glut of production capacity -- especially in memory devices -- and continued weakness in Japan's economy. Wednesday, the Semiconductor Industry Association said it plans to release its midyear forecast, based on recently revised numbers from the World Semiconductor Trade Statistics organization. A spokesman for the SIA hinted that the revised numbers will be in line with recently lowered forecasts by industry analysts. >> Story at: techweb.com