Friday, February 13, 2009

GSI Technology 10Q

GSI is a fabless supplier of SRAMs with Cisco as a key customer. This disclosure offers insight to the Cisco supply chain management in the downturn.

Key customer: "Based on information provided to us by Cisco Systems’ consignment warehouse and contract manufacturers, purchases by Cisco Systems represented approximately 28%, 30% and 28% of our net revenues in fiscal 2008, 2007 and 2006, respectively. During the quarter ended March 31, 2007, Cisco Systems announced the implementation of a “lean manufacturing” program under which it reduced the levels of inventory carried by it and by its contract manufacturers. The transition to this new program resulted in reductions in purchases of our products by Cisco Systems’ contract manufacturers during the quarter ended March 31, 2007, as they drew down existing inventories. This transition continued to impact our revenues in the quarter ended June 30, 2007. Purchases by Cisco Systems’ consignment warehouses and contract manufacturers increased in the four quarters ended June 30, 2008 compared to the two immediately preceding quarters and then declined again in the two quarters ended December 31, 2008."

Distributors: " the nine months ended December 31, 2008 and in fiscal 2008, 2007 and 2006, our distributor Avnet Logistics accounted for 23.8%, 29.2%, 24.7% and 30.4%, respectively, of our net revenues and our distributor Nu Horizons accounted for 7.8%, 7.2%, 8.7% and 10.3%, respectively, of our net revenues."

Wafer Supply: ".....we obtain wafers from a single foundry, TSMC."