Replies to post #71081 on Intel Corp (INTC)

[FCguy]

I think your argument underweights the lag time between wafer starts an shipped goods. Yes, the new guidance was very sudden and fairly deep...that said Intel has been starting wafers until very recently...that's a lot of product now in transit. My knowledge is out of date ... but back in the day if we tried to hold work in progress for anything more than a minimal delay ... yield took a holiday. Might not be the case today but if it is Intel could be looking at many weeks of capacity coming down the pipe. Also perhaps out of date was the fact that if we tried to throttle a line down to less than 70 to 75% of capacity ... again yield took a holiday.

So until and unless Intel can move products around so that an older fab or two can be idled they may be eating inventory.

Like I said, I'm out of date, but perhaps someone current will chime in.

[Saturn V]

Inventory Accumulation


... I cannot work thru the numbers. I am off onto a cruise and will taking a flight within an hour. [ I bought this expensive exurcion six months ago, and am doing my best to keep up world consumption ;-) ]

It appears that the Grinch has stolen Christmas world wide.

Such sudden demand shocks cause inventory accumulations at all levels. Computer Retailers, Computer Manufacturers, Chip Distributors, Finished Processors,Wafers and work in process etc. Wafer Starts may be reduced dramatically. But it is unlikely that 45nm Fabs will be shut down, although Core2 Wafer Starts will take a big hit. Most likely Intel will try and push new products like Dunnington,Nehalem & Atom with aggressive pricing to stimulate demand.[ That is why AMDs pain is likely to increase even further]. Intel's older Fabs will probably be obsoleted earlier and the economic slowdown is a good opportunity to reoutfit them for the next generation.