Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Clarksterh who wrote (22234)	7/28/1998 11:38:00 PM
From: C_Johnson	Respond to of 70976

Hello Clark, Those are actual IC unit volumes - measured in individual chips - not measured in dollars. The only thing I can think of that would cause the actual number of chips sold to decrease would be an inventory work-off given that the world consumer economy seems to be still rolling along. When the connector companies - AMP, the analog guys - ADI and the passive component players - Kemet, are saying their business is falling off it becomes clear that there is a problem with end demand. It could be SEA, it could be channel clearing, it could be a host of items. It is notable that U.S. Electronic End Equipment orders and sales are still essentially flat for the past several months and off a bit since last August/September. This data seems to exhibit a strong correlation to the IC units numbers. I think we have enough evidence to say that final demand is slowing in a broad spectrum of categories and it is not just channel clearing. Based on what Ron says he heard from the contract manufacturers at today's Robertson Stephens Conference, the unit volume weakness is really evident in those exposed to the PC business. I am sure he will have some good updates on this as the week progresses. 1) DRAM shrinks, while PC memory requirements do not increase - thus many fewer chips per PC. DRAM units are less than 5 percent of total units shipped so I don't think this is the cause for the drop. While total bits shipped is growing (I have another chart but I am not going to post it) DRAM units are still going down. Clearly, this discontinuity is the result of the transition from 16Mbit to 64Mbit parts. Over the long run, we expect to see DRAM units continuing to grow linearly and bits exponentially. System chips..... Well, we would need to break out the data to see how big a role they are playing in the unit fluctuations. My guess is not that much. Regards, Carl INFRASTRUCTURE infras.com