14:23 ET Dell Computer: may have weak first half of 2002 (DELL) 25.55 -0.65: Merrill Lynch believes that the consumer sales strength expected for Q4 will not carry over into Q1, and that there is risk in the PC sector in 1H02; sees a high likelihood that the co will forecast sequentially down revs for Q1 (confirming Street consensus of seq rev decline) when it reports on Feb 14; firm is comfortable with Q1 est of $0.16 and maintains Strong Buy rating.
I believe a good yardstick to Dell is checking their web page and going through the selection of a system and seeing how much it is. The cost of a system, with everything else being equal, varies from week to week and it probably corresponds to how many units they currently have on order.
Recently PC cost for the lower end 4400 systems, the base line I use, have been real cheap therefore it seems supply out weighs demand with the end result being, Dell probably is struggling to sell systems. Not a good sign for the industry in general.
Your observation about Dell dovetails with the Merrill analysis. The health of the PC business is critical to CYMI. The processors, memory, video chips (as opposed to comm chips, ASIC's, etc.) are the applications that are pushing the fine line widths. If PC sales slacken, I believe CYMI's business will also. CYMI management seems to be betting on recovery. The on-again/off-again nature of reported shortages of 193 nm scanners also leads me to believe that some deliveries are being pushed off, which also would be detrimental to CYMI's business. These are all just guesses on my part.