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[wadegarret]

Jaybird - just read this message from MikeS97707

Jaybird, I had overlooked this message and it kind of explains an answer to what I asked you about the difference between the buildup in Inventories for the EMS sector vs the Semi sector. Here is Mikes post from earlier...

Posted by: MikeS97707
In reply to: jaybird249 who wrote msg# 50522 Date:8/4/2006 1:08:56 PM
Post #of 50589

I agree with Jaybird re: SMTX & inventory...

I think timing the end of the cycle with inventory would apply more to semiconductor companies than an EMS company. I believe that EMS companies generally purchase parts in response to purchase orders from customers. A semiconductor company is more likely to be buiding inventory to be sold later as opposed to building to purchase orders. The lag time between starting production and completing production for a chip is in the 13 to 26 week range. Consequently, semiconductor manufacturers build in anticipation of demand. How much they build in anticipation of demand also depends upon how generic the part is. For example, memory parts are generic whereas a baseband processor for a cellular phone may only be targeted at one customer.

Mike

Jaybird- do you see it the same way? Wade