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Technology Stocks : Silicon Motion Inc. (SIMO)
SIMO 92.00+1.7%Jan 14 4:00 PM EST

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From: Elroy6/26/2019 12:01:59 AM
   of 2454
 
some tidbits from the MU Q&A.

one of the big drivers of our increased inventory level is in NAND. And that is kind of by design for us. We are trying to build up some inventory going into 2020, fiscal 2020 for us because we are going to make this transition to replacement gate. Replacement gate doesn't drive very much bit growth for us in the first node in replacement gate. And so, we'll need to draw on our inventory in order to meet demand, and that's – I don't know the exact number, but that's a decent chunk of the [overage] in terms of days.

from a kind of an obsolescence perspective, we don't see really any risk with the inventory we're carrying.

We think it's very good inventory, it got a good cost position, very good demand with that inventory. So, unlikely to have any issue as it relates to obsolescence. The other of course area, you have to concern yourself with is the, any sort of lower cost to market issue with the inventory. I think you can kind of guess by the quality of our gross margins that we are not really in danger of having any write-down associated with lower cost to market. So, outside of these kind of one-off issues that we deal with from time to time, like we did with Huawei this quarter I don't really see a big issue with inventory in terms of write-downs or reserves.
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