Yep, if you look off into the distance, you can see it. A little bit at a time, we're seeing the end of something that likely should never have started -- the notion that the technology industry was in the midst of some massive rebound, the beginning of the "next bull market."
We've noted that many of the biggest tech companies, such as Hewlett-Packard
But the risk in rising inventories is that sales do not continue to improve. This has already started happening; in the second half of the year companies such as Intel have stated that customers were delaying orders, and as a result these companies were going to burn off inventory to respond to the "soft spot" in sales. The implication is that the softness in technology spending is short-term in nature, a problem that would work its way through in a quarter or so.
Recent supplier warnings tend to confirm what I had thought all along: It's not the soft patch that is short-lived, it was the spike that was temporary in nature. On Tuesday, integrated circuit manufacturer Xilinx
But who are Xilinx's customers? Well, to start with, another company that warned recently, contract manufacturer Celestica
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Bill Mann owns none of the companies mentioned in this story. He is waiting for prices to drop before he replaces his current PC and is sure that they will do just that. Please check his profile for a list of current holdings.