Nick, You are precisely right; I share your opinion when it comes to most Wall Street analysts. Before selling my company I was in the semiconductor industry for a quarter century.
Regards, Paul McWilliams
Dylan, I appreciate you quoting me today. With the Dell data now in hand I've made some projections for the State of Tech company set I cover. Together, these companies will produce roughly $650B in revenue this year.
My projection for total revenue in the set is 36.4 days, down from 37.8 last quarter, down from 41.2 in Q3 2008 and down from 41.9 in Q3 2007. Q3 2007 is a nice basis here since demand fell off quite sharply starting mid-September 2008.
In the semi sector where I track the companies representing about 45% of what the SIA reports as worldwide revenue, days sales in Q3 69.5, down from 75.1 last quarter, down from 81.0 in Q3 2008 and down from 79.3 in Q3 2007.
What's interesting here is that there has been a concerted effort during the last year to move towards consignment arrangements (hubbing). This has effectively moved inventory allocations in the semi sector back through the chain to semiconductor companies. While this will prove to be a good move and remove some of the volatility from the system, right now there are a number of part types in short supply due to bottlenecks in package and test. I've not heard reports of terrible, but present to some varying degree.
I'm always looking for inventory bubbles and the only one I see now is in LCD drivers (slowing demand in some package and test houses). DRAM prices appear to be softening for December, but no reports of excessive inventory yet.