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mtarascio t1_j1uqx6k wrote

Reply to comment by BayouMoose in Chipmakers Struggle With Inventory Buildup On Pandemic Demand Correction by Genevieves_bitch

Because it's budgeted and necessary to make breakthroughs to have the new chips attractive again.

They've been feeding, time to put back some of that in investment.

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BayouMoose t1_j1v6lxk wrote

If they’re not making any money they can’t invest money. When your revenue goes down, your operating expenses go down as well

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mtarascio t1_j1v6uk0 wrote

It's cycles mate. They use debt off the stored value of their good times, whether via market cap or stock buybacks.

You can enact austerity if you're an idiot.

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BayouMoose t1_j1v7hgm wrote

That’s not how a business works. You don’t burn cash when you are t making it. They’ll be doing r&d for sure, but when you have less cash coming in and more inventory building, the solution is not spend more money to sell a new product when the old ones are selling

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