Ed the Serial CEO is happy to see that the orders are flooding in as the semiconductor market appears to be on an upwards trajectory. He is surprised to find that his product managers are only raising their orders for foundry silicon by 20-30%.
'I call a product managers' meeting and point out that monthly orders for many product lines have doubled since last quarter, while orders for a few product lines have tripled', writes Ed in a diary entry, then I ask them: "So why are our orders for foundry wafers only up by about a quarter?"
A tad sarcastically, I add: "Are we planning to lose market share?"'
"It's all to do with double-ordering and triple-ordering", responded a product manager, "when capacity is tight and demand is climbing, some customers double order and triple order parts to make sure they get what they need. If we ramp up our orders on foundries to meet all the orders put on us by our customers, we'll very likely see a large proportion of that silicon coming back to us in the shape of returns."
'"OK", I reply, "so what's best to do?"'
'"With the greatest of respect Ed', said the product manager (did I detect a note of sarcasm or am I getting paranoid) it might be best if you left us to judge the real state of demand and to commit to foundry orders accordingly."'
'So am I the village idiot round here?', writes Ed, 'Are they smirking up their sleeves at me?Do I care?'
'Only another 291 days to the IPO and I'm out of here with a lump of dosh so big it'll choke those product managers.'
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