>> There must have been a large number of order cancellations, since the new guidance is significantly lower than the old minimum. Means that there will be significant inventory accumulation.
<<
re inventory. Intel's customers reduced their demand by $1.2B. With 55% margin, that means Intel's inventory should increase by $550m. However that would be finished parts. If they hold the parts as wafers, and slow down test and packaging, maybe the excess work-in-process will be only $400m or less.
Further, since Intel tries to exit q4 with reduced inventory (from q3), possibly the inventory bump will be even lower. Like $200m. Also, from Intel's comment, it is likely that distributor inventories will be very lean. So the larger inventory held by Intel will just compensate for low inventories with computer makers.
Does this seem reasonable, or is something missed here ?
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