Intel Reduces Flip Chip Orders

INTC - Recently, Intel has reduced flip chip package orders to Japanese vendors. Intel is reducing inventory levels by up to 30%, which we think could result in substrate production cuts at Shinko Electric Industry, Ibiden, and NGK Spark Plug. (Sato) We also see a cut in flip chip production in Taiwan. The majority of the volume is PC-related, such as graphics and CPU. Channel input also indicated one graphic vendor has held down wafer and back-end work-in-process since mid-August.