Tony Sagami, owner and founder of Harvest Advisors, submits: Xilinx (Nasdaq:XLNX) is the largest maker of PLD (programmable logic devices) chips, which are chips that are programmed to perform specific functions such as keeping time or holding phone numbers in your cell phone. Just about every electronic device in the world needs PLD chips. Xilinx’s biggest customers include Lucent (ticker: LU) and Cisco (ticker: CSCO) and its main competitors are Lattice Semiconductor and Altera. Well, Xilinx hit s new 52-week low on Monday after it warned that its sales would be below expectations. Details:
Xilinx warned that its Q3 sales would fall by 1-2% versus its previous forecast of flat to up 4%. In dollar terms, that means that instead of $405 to $421 million of sales, Xilinix is only going to pull in $397 to $401 million instead.
Since Xilinx sells more than 50% the world’s PLD chips, this profit and sales shortfall tells you volumes about the demand for consumer electronics.
When combined with the SimgaTel warning, you should see the outline of a very troublesome picture for the consumer electronics industry.