Laxman.R

Bottoms Up for Chip Sector

I am not sure that the entire sector has bottomed out. Perhaps part of the sector has. IDC seems to think that there is more to come and that a semi recovery will perhaps begin in Q1 of 2010.

The AIG Scandal

More heads ought to roll and fast! The post and many of the comments have hit it right on. It's a game of "ultimate hypocrisy" and "ultimate travesty" and "ultimate tragedy" - all put together. Many of the companies that created this mess are being repeatedly bailed out, CEO's/Exec's being rewarded for failure. Why? Why can't these companies be allowed to freaking-fail? How much worse can it get - anymore?

The entire country should be baying for the heads of the CEOs/exec's who created this mess. Why is there no outrage? We are just sucking it up again and again!

Reconnecting with Economics

Interesting thoughts. On the bail-out(s), I am inclined to agree with you. Bad behavior is amply being rewarded - sadly. Look at AIG's situation today, a colossal $62B (projected) loss, but a nice parachute of $30B of TARP money softens their landing. The TARP is a big joke and an utter waste of public funds. Companies that literally gambled away shareholder money are being propped up. Confidence and trust has been lost. I hope that at the very least the government is working to indict some of the folks who got us into this mess in the first place. It is tall order - but I think it will instill two vital intangibles that have been seriously eroded - "confidence and trust".

2009: Another Year of Shock and Awe

You have covered a lot of ground in this article. With all this gloom and doom everywhere - what is the solution?

You rightly mention that this 'recession/depression' has been years in the making and is the end result of over spending, gross consumerism, low or no savings, corporate greed, lack of government oversight etc etc. Given that hindsight, can this problem be corrected overnight - I guess not ! Can me and you solve the issue - no! If we are let the market take over and hope that 'market' can correct this - we all agree that would be a mistaken strategy that will make a really bad situation - really worse. Only the government has the capability to stem the rot.

Given the magnitude of the problem, there is no silver bullet. This problem will have to approached with a multi-pronged solution. Cash injections is necessary and so are 'temporary' nationalization of banks and financial institutions. True, a whole generation of us have worries as to where the monies will come from (printing or borrowing) and what it will do to the dollar and how will we pay it all back. One cannot expect the dollar to hold it's value given current situation - it will take a hit (hopefully temporarily). But, if nothing is done - we are all done for ! The governments plan is not perfect - but at least we know that there are tons of eyeballs scrutinizing and trying to solve this problem.

Further, I hope that one thing America does learn from this catastrophe is to start 'saving' and to 'consume within means'. I also agree that due attention should be given to the manufacturing sector while maintaining a balance with consumerism.

Chip Sector Shrinks: Broadcom, Texas Instruments, STMicroelectronics

Ditto. Great summary!

Intel Is Nervous About New 12 Inch Netbooks

Good point.
High margin CPU's (Core 2 duo/Quad-core etc) will take a beating if netbooks proliferate upwards thru the value chain. Intel achieves phenomenal yields on Atom (high 90s), which makes the Atom's cost basis very low. There are margins there - which on an aggregate will be high due to the volume play. But you are right in pointing out that Atom will cannibalize sales in the volume and performance segment.

As Cellphones and Netbooks Converge

Good read. Not entirely convinced about the netbook and cellphone convergence theory. One thing I am convinced about is the exponentially increasing ability of handsets to compute - convergence of communications and computing. The issue is with usable form-factors and usage models. On the other hand the convergence of communications with computing has already occurred in laptops/netbooks with cheap VoIP solutions and in many cases CDMA technology.

Sector Overview: SaaS

It is certainly impressive to see SaaS move on from just being a paradigm a few years ago to more main stream. The challenge for SaaS is to penetrate the back haul of an enterprise, where typically ERP implementations reside. Not sure if that would be entirely possible due to the various challenges with customization, integration, impact to mission critical apps, availability, reliability etc.

But at the same token established ERP vendors like ORCL, and SAP beware - as penetration of SaaS into the enterprise back haul could hurt real bad!!

Online Penetration Continues to Grow

That's very interesting. I wonder what technologies exist out there that will help DSL compete with Cable. DSL runs on copper that has limited band-width as a result of frequency attenuation at higher frequencies. If DSL has to offer Triple-play and IPTV, then the wires need to support a very high bandwidth with low signal to noise characteristics.

Further, I would also imagine that 4G networks (WiMax), should it take off in a big way will be strong competitor to Cable and DSL down the road.

Semiconductors in 2009: How Bad Will It Get?

Good summary. The cyclicality of the semi sector has been further exacerbated by the global downturn. I think semi's are in for a rough ride in 2009 and may see a recovery in 2010.

Will semi industry ever hit the $300B mark?

Four Dying Silicon Valley Companies

Good posting. With regard to AMD, I would say that the company would limp along. It has a good CPU product portfolio that a few years ago was kicking butt. The problem with AMD is execution - they should've capitalized on their bull run a few years ago - but did not. I think the company will stay alive or rather will be kept alive for two reasons -
(a) If AMD dies, the CPU market will become a monoploy. This will lead to all sorts of headaches for Intel from anti-trust issues to price gouging and so forth.
(b) AMD CPU's offer good value for money and there is still demand for them. Starting from HPC to laptops, on the value end AMD is a key player.

With regard to Yahoo!, I think it will also limp along. It still has a solid base of die-hard fans that run into hundred's of millions, it has a powerful brand name and some of it's pages (News, Finance etc) are really good. But I agree with many comments that the company needs to turned around fast.