This is long-sorry wsh
This is from memory, but INTC showed a minor increase for 3Q and projects a further modest increase for 4Q. Yesterday, AMD announced a terrible 3Q, but the company projects 20% revenue growth in 4Q, QoQ. As I write this, AMD is up 22%.
I realized after I wrote that comment, that the statement on rev's wouldn't hold up, thanks for catching that. I've never professed to be the numbers guy. Someday Dew will take me to task for this. I see market trends associated with the semi business. I do not see as rosy a forecast as AMD and Intel paint for the public. The only reason they are stating such comments is hope and history of 4th quarter sales, as Dew had pointed out in the following post on this.
As far as TMTA is concerned, I'm still trying to figure out where the inventory for the TabPC chips are. Is it a case of a limited supply of 1 gig chips, diminished expectations, another inventory glitch they really didn't want to bring up or what? This part is disturbing in that there are lead times that have to be met for the TabPC to even be built. First they need to grow crystal and make wafers, ship them to TSMC, make the processor, ship them to the TabPC manufacturer, QC a new product for reliability, ship them to HP, etc, etc, at any point in this process glitches do develop which adds TIME that TMTA doesn't have to meet profit projections. So where are the sales booked and to which quarter? It doesn't seem to be in the 3rd or 4th quarter for this year. I note inventory up to 8.3 mil. So are we stocking inventory for HP and don't expect much in terms of sales until the new year? If TMTA is wrong about sales then the 4th quarter will be much higher for rev's. and the 4th quarter was guided down since they simply don't know how it will turn out. A guess at this point.
The "semiconductor nuclear winter" (ka-ching) has everything to do with contraction, sentiment, and perceived need. INTC has in the past innovated themselves into a stronger market position whenever a slowdown has occurred. This strategy has worked quite well for them. They had the means to do it and let the market catch up when it was ready. This worked fine during an extended bull market, a bubble in demand for electronic gadgets/gizmos(Palm/Hand) and a one-time event-Y2K. Everything started to unravel in semis right after the 1st quarter of 2000 when all that inventory was still being made and no one said stop! The factors which led to INTC's and others fantastic growth prospects was also to their undoing. They made major capital expenditures in plants, equipment, personnel, and spent every dime they had to "grow the business" only to find out it was just a mirage. "We'll wait it out all the ol'timers said (you're an old timer if you have been doing this since 1985) it ALWAYS comes back. Well it got worse, then they got nervous and started cost cutting-didn't work; let's cut employees-get the deadwood-didn't work; let's cost cut some more-didn't work again. They had to work off inventory that was becoming obsolete-write it down they said. Create Kaizen events-didn't work. Create value stream maps (squeeze the excess in the process)-didn't work. I'm not trying to bore you but those who thought they knew best were there own worst enemy-not the employees. They had never worked during a severe business contraction and had built all the new plants with no orders to work down those depreciation costs. How could anyone make money and pay for those plant expenditures when everyone wanted a PC with all the bells and whistles and pay less than $1000? As you even stated in your post the upgrade cycle to a new PC is longer and most likely a mobile replacement.
So now the latest "idea" is to eliminate American labor as a cost and transfer the technology and infrastructure to China. So how are people (unless you're a design engineer)buy these cheap computers when they can expect new jobs at half their current salary? Sure we have a market shift to mobile computing but we are also experiencing a demographic shift in per capita income. That's how I derive some of my "nuclear winter" analogy. It may be extreme but it has played itself out fairly well. I do think sales will come back to semis but there have to be fewer companies doing it and right now the semi's need to start this contraction phase for the good of the industry. We all here don't know yet if TMTA will be one of the survivors. If it is, it will have all the right elements for INTC-like growth for the rest of the decade. The three Fates have yet to decide.
Hseitz4
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