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.

Technology Stocks : Neomagic Corp. (NMGC) -- Ignore unavailable to you. Want to Upgrade?

To: HEXonX who wrote (2254)	12/26/1998 3:13:00 PM
From: thedewar	Respond to of 3645

Y2K problem: The fabless companies, like PMC-Sierra, that depend on Asian foundries don't have this capability or Intel's enormous resources. And even more worrisome, they also seem to lack the same level of concern. In PMC's SEC filings, the company offers a terse 250 words on Y2K preparations. And what of manufacturing subcontractors? Even less is said. "The company believes that many of its suppliers and customers have not completed their own systems modification to be year 2000 compliant," the company reported in its latest 10-Q. "The company has received written communication from its critical suppliers that they have developed an action plan to address the issues related to the year 2000. The failure of significant suppliers or customers of the company to become year 2000 compliant could have a material effect on the company. Those consequences could include the inability to receive product in a timely manner or lost sales opportunities, either of which could result in a material decline in the company's revenues and profits." How big a problem is Asia? Etec (ETEC:Nasdaq) Chief Information Officer Don Lima says the company is planning to arm all its sales and servicing offices with satellite phones because the company isn't expecting a dial tone out of Asia for weeks into 2000. "It was a challenge coordinating the efforts of our foreign offices," Lima says. "They didn't have the same literacy of the Y2K situation. They didn't truly understand the potential impact of the problems." Any company dependent on Asian subcontractors should be worried, Lima says. Y2K experts in other chip companies and equipment makers echoed Lima's and Calder's concerns about equipment failures in Asia. The consensus is that the governments and companies there seem far behind on the Y2K needs. And chip-manufacturing systems are so complicated that the clock has already run out. "If you haven't started now," Calder says, "it's too late." Now the largest Asian foundry operator Taiwan Semiconductor Manufacturing (TSM:NYSE) has been working on its Y2K kinks since December 1997, says spokesman Charles Byers. He expects the company to have all systems and equipment converted and audited for compliance by June. But TSM holds 43% of the foundry market there, leaving 57% of production in the hands of smaller operators. And let's not pick on just PMC-Sierra. There are a whole slew of fabless companies -- communications chip maker TranSwitch (TXCC:Nasdaq), graphic chip maker NeoMagic (NMGC:Nasdaq) and networking chip maker MMC Networks (MMCN:Nasdaq) as just a few examples. NeoMagic spokeman Mark Singer says the company is working on developing contingencies, such as stocking extra inventory and developing alternate suppliers. A spokeswoman for the Dallas-based Fabless Semiconductor Association, which has 48 members, said that Y2K wasn't a major concern with the membership. She also told us to check back in six months. Maybe she didn't realize the Y2K issue is date-sensitive.