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From: mats@dual.UUCP (Mats Wichmann)
Newsgroups: net.micro
Subject: Re: chip availability
Message-ID: <423@dual.UUCP>
Date: Sat, 7-Apr-84 12:13:44 EST
Article-I.D.: dual.423
Posted: Sat Apr  7 12:13:44 1984
Date-Received: Sun, 8-Apr-84 01:36:55 EST
References: <2262@ecsvax.UUCP>
Organization: Dual Systems, Berkeley, CA
Lines: 33

Interesting question, this. We have been bitten by this problem, as have
most other manufacturers, I think. Parts are just not available. Almost
everything is on allocation these days. The much-ballyhooed 256-k
dynamic RAMS are only available in very small quantities, at outrageous
prices, even though there is not problem with either technology or with
manufacturing. The problem here seems to be that the chip mfgs. don't
want to undercut their lucrative market for 64k drams, so they are
withholding the 256k's.
 
Topic for discussion: WHY is the supply of chips so short right now?
If people were making chips at the rate they were a few years ago,
there would be plenty of parts for everyone.

My theory: most of the chip mfgs. got caught with their pants down in the
latest recession. They were building along at a merry pace and all of a
sudden, BANG, nobody was willing to carry inventory any more. Where most
people carried 6 months or more parts stock, all of a sudden they were
trying to pare down to only keeping this weeks' production requirements
in stock. As a result, the chip mfgs. got left with a huge oversupply.
They survived this, although a look at financial reports from a few years
back will show that it wasn't easy on their pocketbooks. It seems that
this time around, they are going to throttle the supply so that they
won't get burned the same way if another recession hits - they will
be building at somewhat under the demand so that if a slump hits, they
will be building right at or a just a little over the demand. Besides,
asupply which is less than the demand would tend to drive the prices
up, right?

As I say, only my theory, but it makes sense to me. Any comments?

	    Mats Wichmann
	    Dual Systems Corp.
	    ...{ucbvax,amd70,ihnp4,cbosgd,decwrl,fortune}!dual!mats