Chipmaker's forecast speaks to downturn

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12/22/2008
I'm not sure how many people are aware of Techwell, a chip-maker who's got product in (according to them) 70 percent of DVRs. They drive the playback engine, essentially. You can read about their HD play here. Anyway, they announced last week new revenue projections that speak to a significant slowdown in security surveillance sales. The numbers are somewhat irrelevant. Here's the nut graph: "Several of our larger security customers in Taiwan and China have pushed out orders in the last two weeks as a result of a build-up of inventory in their factories," said Hiro Kozato, Techwell President and CEO. "It is clear the current economic environment is impacting our core security business as well as our automotive and consumer businesses. However, we remain confident in our long term business prospects. Our design activity with our recently announced TW2880 HD Controller is strong and we believe that our product portfolio, profitability and significant cash balance will help us successfully manage through the current economic challenges." A build-up of inventory in the factories isn't a good sign. Product isn't moving, isn't being installed, isn't being sold. The chip-makers are at the beginning of the pipeline and when the slowdown hits them, it means it's hitting everyone.

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