They can and probably will receive orders before the chip is completed. That is how you book orders before revenue.
Absolutely not. No way. That's simply not how the semi industry works. You know that - at least you should.
Here's how it works. When a semi company produces a product, the first "production" run (not testing samples) are called engineering samples. These are distributed to target custoners (free). The target customers do engineering analysis, speedpath testing, timings, etc., to determine if they can use the product. Only then will they place orders. Never in this industry are orders placed before a product is complete. It doesn't happen.
As for "booking" versus "revenue", let me clear that up a bit. The semi industry operates a little bit differently than most other industries. An order is "booked" when a company places an order for a large number of units. In essence, the "booking" company is laying claim to a portion of the production run, and locking in a price, but there in no firm commitment to pay. Its sort of like pre-qualifying for a mortgage. You get locked into a rate for a certain principle, but there is no guarantee of a sale until the closing actually takes place.
*Usually*, a unit is considered sold when it ships, or is "in the channel". However, this is also no certainty that there will be revenue. This will depend on where the product ends up. With CPUs, for example, Dell might order 250,000 pentiums from Intel, they might ship and Dell might receive them, but if Dell can't use them, they will ship them right back. It is a fickle industry.
An order does not produce revenue until it is "billed", meaning that money has changed hands. In fact, there can be such a discrepency between "booked" product and "billed" product, an industry indicator is the book-to-bill raio. The closer this number is to 1, the better the outlook for the industry.
This is a completely different concept than the "cash" vs "accrual" methods of accounting. At any rate, "booking orders" does not, in any way, mean revenue.
I do want to thank WHP03 for finding the PR in which Ketch said the ASSP would be complete in 3Q this year. I knew it was out there, but haven't had time to track it down. Obviously, that milestone was not met, even though they still have several million in cash. Given the late date, there is no way that there will be any silicon this year. No surprises there. I have to say that I am continuously amazed at the capacity for forgiveness that the faithful here have. Year, after year, after year goes by with nothing but promising PRs, and the same old bunch makes excuses for the company.
Oh, well. There'a always next year.
AI
