Lehman out on semis

Tim Luke out with a summary of his recent trip to Asia, there's a conference call @ 10:30am.

Notebooks remain strong, desktops and servers are weaker; he thinks Intel's second half numbers look conservative. Broadcom and Nvidia could have lowered numbers for the quarter but he believes there's valuation support – I agree there. Not from Lehman, but I've read more than once that a fire at an LG battery plant is constraining notebook builds for HPQ for the quarter and they've ratcheted down their plan for the quarter to get in line w/ their limited battery supply.

Cell phones are weak with inventory adjustments at Nokia and difficulties at Sony Ericsson and Motorola weighing on growth. Totally right, Nokia has been pulling back at the high end at a couple of their supply chain partners.

He cites some slowness in Xbox and PS3. My observation is that following the initial pop following console price cuts, PS3 picked up some share but the data has been moderating. Xbox, which enjoyed an early lead in the market has held up but definitely has been slowing. Halo 3 drove some good console uptake around the holidays but last month's data was showing some sluggishness. The Wii continues to dominate the category. It seems like the only thing keeping Nintendo's console shipments capped is limited supply – it's amazing to me that over a year after it's release one still can't walk into a store and walk out with a Wii.

Apple is still not around and NAND remains weak. Samsung thinks they'll be back in April, Hynix thinks June. I think Apple is symptomatic of the problems in the NAND market. Sure, they're a big portion of the sales. Sure, they matter. At CES I saw literally a hundred different NAND players that no one will buy. That to me is the bigger problem… too many marginal players that don't really belong in the marketplace have created an overestimate of how much NAND is needed. This will take time to correct.